Tech job cuts – including mass layoffs at Meta and Twitter
A number of tech companies have announced cost-cutting measures for 2022, with Amazon, Apple and Google parent Alphabet all announcing slowed or discontinued settings.
For the tech sector, the pandemic boom turned into a post-pandemic collapse, as rising interest rates beat stock prices and inflation squeezed profits.
The sector shed 9,587 jobs in October, the highest monthly total since November 2020, according to data from consultancy Challenger, Gray & Christmas, cited by Bloomberg.
Job cuts announced by US-based employers rose 13 percent in October to 33,843, the highest since February 2021, a report said.
Facebook’s parent company said in November it would cut 13 percent of its workforce, or more than 11,000 employees, in one of the biggest layoffs in the tech sector this year as it grapples with a weak advertising market and rising costs.
Meta cut 13 percent of its workforce, or more than 11,000 employees, in November 2022
Like its peers, Meta has been aggressively hiring during the pandemic to accommodate a surge in social media usage by consumers stuck at home.
But the times of the pandemic boom ebbed as advertisers and consumers pulled the plug on spending amid rising costs and soaring interest rates.
After pouring billions into CEO Mark Zuckerberg’s Metaverse vision and with little to show for it, Meta faces rising costs and shrinking profits.
Meta, once worth more than $1 trillion, lost around 70 percent of its value in the last year alone. Stocks have rebounded in 2023, but remained below their peak at the beginning of March.
“Not only has online commerce returned to previous trends, but the macroeconomic downturn, increased competition and loss of promotional signals have resulted in our revenues being much lower than I anticipated,” Zuckerberg said in a statement the employees.
“I got that wrong, and I take responsibility for that.”
Zuckerberg broke the grim news of the downsizing over a phone call with hundreds of meta-executives
On a quick call, a red-eyed Zuckerberg addressed the staff but didn’t take any questions.
Sticking to a script that closely matched the phrasing in the morning’s blog post, he called the increased investment in e-commerce a “big mistake in planning.”
Twitter laid off half of its workforce across all teams ranging from communications and content curation to product and engineering following its $44 billion acquisition of Elon Musk.
The cuts affected around 3,700 employees who found out about their fate by email last week.
Twitter is laying off half of its workforce into teams ranging from communications and content curation to product and engineering
In January, cloud-based software company Salesforce announced it would lay off 10 percent of its employees, or about 8,000 workers.
CEO Marc Benioff cited a difficult time for the technology sector and over-hiring during COVID-19 that led to the decision.
“Our sales performance process encourages accountability. Unfortunately, this can result in some leaving the company, and we’re supporting them in their transition,” said a Salesforce spokesperson.
Salesforce had 73,541 employees early last year — it’s the largest employer in the San Francisco area.
The company said in an August filing that headcount increased 36 percent over the past year “to meet increased demand for services from our customers.”
Amazon said it will lay off 18,000 corporate and technology jobs in what will be the largest job cuts in the company’s history.
The move comes as the company reportedly lost $1 trillion over the year after its shares plummeted from a peak during the pandemic.
If the company goes through with its proposal to cut 10,000 jobs, it would lose about 3 percent of Amazon’s employees
The move comes after the company imposed a hiring freeze affecting large teams like Prime Video, Alexa and Amazon Fresh.
“We are facing an unusual macro environment and we want to align our attitudes and investments by reflecting on this economy,” Beth Galetti, Amazon’s senior vice president of people experience and technology, wrote in a memo.
Intel Corp CEO Pat Gelsinger told Reuters that “people action” would be part of a cost-cutting plan.
The chipmaker recently said it would cut costs by $3 billion by 2023 and then increase them to $10 billion by 2025.
The adjustments would begin in the fourth quarter, Gelsinger said, but didn’t specify how many employees were affected.
Some Intel divisions, including the sales and marketing group, could be cut by as much as 20 percent, Bloomberg News reported last month, citing people with knowledge of the situation.
Chipmaker Intel is reportedly planning major layoffs likely to number in the thousands as the PC market slows
The company employed 113,700 people in July when it cut its full-year revenue guidance by $11 billion after missing estimates for second-quarter results.
Intel, based in Santa Clara, California, declined to comment on the job cuts when it reached DailyMail.com in October.
Intel has been buffeted by shifting market trends, including the demise of traditional PCs as smartphones and tablets become more popular.
Global PC shipments, including desktops and laptops, fell another 15 percent year over year in the most recent quarter, according to IDC.
Microsoft initiated layoffs of 10,000 employees in January, citing slowing customer demand and a negative economic environment.
“We are also seeing companies across all industries and geographies exercising caution as some parts of the world are in recession and other parts are anticipating a recession,” CEO Satya Nadella said in a company memo.
The layoffs affected nearly 5 percent of Microsoft’s global workforce.
According to Axios, Microsoft laid off under 1,000 employees in several business units last year.
In a statement, Microsoft executives said: “Like all companies, we regularly assess our business priorities and make structural adjustments accordingly.
According to Axios, Microsoft laid off fewer than 1,000 employees in several business units in the past month
‘We will continue to invest in our business in the coming year and hire in key growth areas.’
Microsoft executives earlier announced in July that the company would lay off less than 1 percent of its workforce and significantly slow hiring as revenue fell short of investors’ expectations.
The company reported just $51.9 billion in revenue for the second quarter of the year but was expected to rake in $52.4 billion.
It had previously seen blockbuster growth during the COVID pandemic as consumers and businesses turned to its products as they transitioned to a work-from-home model.
Ride-hailing company Lyft said it would lay off 13 percent of its workforce, or about 683 employees, after cutting 60 jobs and freezing hiring in September.
Lyft said in a regulatory filing that there would likely be $27 million to $32 million in restructuring costs associated with the layoffs.
“We are not immune to the realities of inflation and a slowing economy,” Lyft’s founders wrote in the memo to employees.
Ride-hailing company Lyft said it would lay off 13 percent of its workforce, or about 683 employees, after cutting 60 jobs earlier this year
The company’s share price is down 76 percent year-to-date, trading at $9.75 on March 6, compared to nearly $45 in January 2022.
Lyft has about 4,000 employees, not counting drivers.
The music-streaming service announced Jan. 22 that it plans to cut 6% of its workforce, an estimated 588 employees out of its 9,800 full-time employees.
Spotify said about $38 million in severance fees would be incurred.
The company, of which Daniel Ek is CEO, said its chief content and advertising business officer, Dawn Ostroff, will also be leaving.
Spotify said Jan. 22 that it plans to cut 6% of its workforce, an estimated 588 employees from Apple
Though Apple hasn’t announced any major layoffs yet, CEO Tim Cook told CBS Mornings that it’s also slowing some hiring.
“As a result of being in this period, we’re very conscious about our recruitment,” he said. “That means we’re still hiring, but we’re not hiring everywhere in the company.”
But at the same time, Cook said, “We don’t think you can save yourself the road to prosperity.”
“We think you’re investing your way there,” he said.