Tech giants are making the headlines but for disappointing reasons- Layoffs. Microsoft, Google, IBM, SAP, Salesforce and many other tech companies are announcing job cuts, citing the macroeconomic environment as the main reason behind this move.
As per media reports, more than 1,50,000 employees lost their jobs in the tech sector alone in 2022. 2023 looks much worse.
LAYOFFS IN MARCH 2023
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Accenture
IT Services and consultancy firm Accenture said that it would lay off 19,000 employees, over the next 18 months amid unfavourable macroeconomic conditions. The company has also revised its fiscal year 2023 revenue growth. The revenue expected to grow ranges between 8% to 10%, down from a previous estimate of 8% to 11%.
The CEO, Julie Sweet said, “We are also taking steps to lower our costs in the fiscal year 2024 and beyond while continuing to invest in our business and our people to capture the significant growth opportunities ahead.”
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Amazon
Amazon announced the layoff of 9,000 more workers from several business units, including AWS. This round of layoffs comes after it cut 18,000 jobs in January. As per CEO Andy Jassy, the company had added a considerable amount of staff but the uncertain macroeconomic conditions have forced them to think of headcount cuts.
The CEO wrote, “Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”
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Meta
After announcing 11,000 job cuts in November, Meta is further slashing 10,000 more jobs. In addition to the job cuts, 5,000 vacant positions will be left unfilled. In February, the giant posted falling profits and its 3rd consecutive quarter of declining revenue. The company also announced buying back as much as $40 billion of its own stock.
The CEO Mark Zuckerberg said, “This will be tough and there’s no way around that.”
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Atlassian
Australian software company Atlassian announced plans to lay off 500 employees, 5% of the workforce. In early February 2023, the company posted revenue of $873 million for its second quarter of the fiscal year 2023. However, Atlassian still closed the quarter with a $205 million net loss, despite witnessing a substantial increase in subscription revenue growth.
The Co-CEOs, Scott Farquhar and Mike Cannon-Brookes said, “We want to be clear these decisions are not a reflection of our teammates’ work. Every single person has made contributions that have changed our company for the better and will leave a lasting impact on their peers and teams. This is about rebalancing the roles we need across Atlassian first and foremost.”
LAYOFFS IN FEBRUARY 2023
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Twitter
In another round of layoffs, Elon Musk announced job cuts of about 10% of its workforce. Just before Musk bought Twitter, the company had about 7,500 employees. The number currently stands at only 2,000. The layoff impacted data scientists, product managers, and engineers. Surprisingly, Esther Crawford who had gone viral for sleeping on the Twitter office floor to meet a deadline has also been laid off.
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Microsoft
The tech giant confirmed the layoff of employees working on Hololens, Xbox products and Surface laptops. The layoffs are part of a plan to lay off 10,000 employees as said by Satya Nadella in January 2023. As per Bloomberg, Microsoft has laid off in Xbox marketing and the Xbox Gaming Ecosystem Group.
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Yahoo
Yahoo announced the layoff of 20% of its workforce in February. Out of which 12% (nearly 1,000 employees) were laid off on the day announcement was made and the rest 8% (600 employees) will be laid off in the course of 6 months.
In an interview with Axios, Yahoo CEO Jim Lanzone said that the layoffs by the company are not a result of economic uncertainties, but rather, intentional changes that would strengthen the unprofitable Yahoo for Business advertising unit.
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GitHub
Microsoft-owned software development company GitHub announced laying off 10% of its total workforce of 3,000 employees. The company will also continue its hiring freeze and will make some internal changes to ensure its short-term health.
The CEO Thomas Dohmke wrote in an email to the company’s staff, “Although our entire leadership team has carefully deliberated this step and come to an agreement, ultimately, as CEO the decision is mine. I recognize this will be difficult on you all, and we will approach this period with the utmost respect for every Hubber.”
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Zoom
The most popular video conferencing platform, Zoom announced job cuts of 1300 employees, which accounts for 15% of the workforce. Zoom CEO Eric Yuan announced a 98% reduction in his salary and also said that no member of the executive leadership team would be taking the corporate bonus and their base salaries would be reduced to upto 20% to cope with the current situation. Zoom became a go-to choice for almost every school, college, business and personal communication. The decision came after the company witnessed a slowdown in its demand by the people.
The CEO wrote in his blog post, “The uncertainty of the global economy, and its effect on our customers, means we need to take a hard — yet important — look inward to reset ourselves so we can weather the economic environment, deliver for our customers and achieve Zoom’s long-term vision. This is a difficult decision that we do not make lightly. We are grateful for the hard work and dedication of all our employees.”
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Dell Technologies
One of the leading technology companies Dell Technologies announced the elimination of 6650 jobs or 5% of its global workforce due to declining PC sales and infrastructure requirements. As per the statement given by Co-Chief Operating Officer Jeff Clarke, the company will introduce changes in the structure of the sales team and integrate the services division of its infrastructure and consumer businesses.
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PayPal
The fintech firm PayPal announced 2,000 job cuts or about 7% of its workforce due to the challenging macroeconomic environment. Although the company reported gains in the third quarter, it downgraded its forecasts for the fourth quarter of 2022.
The President and CEO Dan Schulman wrote, “Change can be difficult – particularly when it includes valued colleagues and friends departing. We will face this head-on together, drawing on the unparalleled scale of our global platform, the strategic investments we have made to strengthen our core capabilities, and the trust and loyalty of our customers.”
LAYOFFS IN JANUARY 2023
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SAP
SAP’s net income dropped by 68% which forced the company to lay off 2800 employees. The company said that job cuts would cost a whopping amount between 250 and 300 million euros, in the first quarter of 2023. Currently, it has 8500 employees working in metropolitan cities- Bengaluru, Pune, Gurgaon, Hyderabad, and Mumbai.
SAP said, “This was a difficult decision, and we are deeply aware of the personal impact of these changes. We will provide colleagues the care and support they need during this challenging time.”
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IBM
The International Business Machines Corporation announced to lay off 3900 positions or 1.5% of its workforce, despite posting revenue growth across all its business divisions. The company will continue to hire in focus areas.
Chief Financial Officer James Kavanaugh said that IBM is seeing its consulting business grow in terms of cloud spending. It doubled its signings with partners like Microsoft’s Azure and Amazon’s AWS to set up the services.
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Google
The major shock came to the tech industry when Google’s parent company Alphabet announced plans to cut 12000 jobs or about 6 per cent of its global workforce due to rising inflation and global market conditions.
The CEO Sundar Pichai took full responsibility for the decisions and said in a blog post that the layoffs marked a moment for the firm to “sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities.”
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Microsoft
The company’s CEO Satya Nadella confirmed in a blog post that Microsoft is laying off 10,000 employees which are nearly 5 per cent of its total workforce.
He wrote, “Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3. This represents less than five per cent of our total employee base, with some notifications happening today.”
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ShareChat
Google-backed short video-sharing platform confirmed cutting 20% of its workforce, citing economic uncertainty as the prime reason. Although the company had tried optimising costs across multiple divisions for the last six months, macroeconomic conditions, according to them, can negatively impact cost and availability of capital.
A ShareChat spokesperson said, “…. we need to prepare the company to sustain through these headwinds. Therefore, we’ve had to take some of the most difficult and painful decisions in our history as a company and had to let go of around 20% of our incredibly talented employees who have been with us in this start-up journey.”
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Salesforce
The American cloud-based software company announced another round of job cuts in early January as it would focus on improving profitability. The company would eliminate 8,000 employees or 10% of its workforce. The investors of ShareChat are pushing to cut costs further to ensure an improved profitability and increased earnings.
Chief Operating Officer Brian Millham said, “The structure of the organization — if we feel like it needs to change and reshape — we’re going to make those moves to drive the efficiencies.”
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Amazon
Another tech giant Amazon announced laying off 18,000+ employees due to economic tensions. The majority of job cuts were announced in Amazon Stores and People, Experience, and Technology (PXT) organisations. The company went on a hiring spree during the Covid but planned a freeze in hiring across its corporate workforce. It announced another round of layoffs in March as well.
