Many tech companies like Microsoft, Twitter, Meta were already in the grip of this wave of layoffs. On Friday, Google parent company Alphabet became the latest firm to join the list of IT giants to opt for job cuts.
Thanks to a resilient search business, Google has been one of the longest-running tech holdouts. But the company is facing a slowdown in digital advertising and its cloud-computing division is lagging behind Amazon and Microsoft.
Overall, over 1.5 lakh tech company employees face job cuts in 2022, according to tracking site Layoffs.fyi.
tech layoffs Released in 2023
The job cuts begin in 2022 and accelerate across much of the technology world.
The tech industry is losing jobs at a pace close to the early days of the Covid-19 pandemic.
In November last year, the sector announced 52,771 cutbacks for a total of 80,978 cutbacks during the year, according to consulting firm Challenger, Gray & Christmas Inc. 2000.
Tech companies are set to shed more than 150,000 workers in 2022, with more layoffs expected as growth slows in the world’s biggest economies, according to tracking site Layoffs.fyi. It has started happening.
Here are some of the job cuts announced so far:
Amazon
The e-commerce giant has said it will cut some jobs in the US, Canada and Costa Rica as part of its plan to lay off 18,000 employees.
The company terminated 2,300 employees in Seattle and Bellevue, according to an update on the Worker Adjustment and Retraining Notification (WARN) site cited by Reuters.
Microsoft
Microsoft cut 10,000 jobs earlier this week.
The tech giant said it would take billions of dollars off severance costs, among other changes. For example, US-eligible employees will receive six months of healthcare coverage and stock vesting.
Twitter
The turmoil at Twitter has more to do with its recent buy-out and accompanying debt than economic concerns.
The social media platform laid off nearly 3,700 employees as early as November 2022 in a cost-cutting measure by its new owner Elon Musk, and hundreds more have since resigned.
Earlier this month, the firm made further staff cuts in the trust and safety team handling global content moderation, and the unit dealing with hate speech and harassment.
meta
Facebook’s parent company Meta Platforms laid off around 11,000 employees in November last year. It was one of the largest tech layoffs ever — roughly 13% of the workforce.
It was the first time in Meta’s 18-year history that it had to cut jobs on a large scale.
“I want to take accountability for these decisions and how we got here,” CEO Mark Zuckerberg said in the statement. “I know this is difficult for everyone, and I am especially sorry for those affected.”
apple
The iPhone maker has halted hiring for many jobs outside research and development, according to people with knowledge of the matter cited by Reuters, adding to its plans to slash budgets in the new year.
The break typically doesn’t apply to teams working on future devices and long-term initiatives, but it does affect some corporate functions and standard hardware and software engineering roles.
intel
The chipmaker said Intel is cutting jobs and slowing spending on new plants in an effort to save $3 billion.
That’s expected to save $10 billion by 2025, a plan that went over well with investors, who sent shares up more than 10% on Oct. 28.
Bloomberg News previously reported that the number of staff reductions could number in the thousands.
Lyft
Lyft Inc. The company’s cost-saving efforts include divesting its vehicle service business. It is laying off 13% of its workforce, or about 683 people. The company had already said it would freeze hiring in the US at least until the new year. It is now facing even more severe headwinds.
“We are not immune to the realities of inflation and a slowing economy,” co-founders John Zimmer and Logan Green said in a memo. “We need a period in 2023 where we can execute optimally without changing plans in response to external events – and the hard reality is that today’s actions prepare us to do just that.”
Qualcomm
Qualcomm said it is hiring in response to fears of a sharp decline in demand for phones using its chips. It now expects smartphone shipments to decline in the double-digit percentage range this year, which is worse than the outlook it gave earlier.
Nouveau riche
Upstart Holdings Inc., an online lending platform, said in a regulatory filing that it cut 140 hourly employees “given the challenging economy and the reduction in loan volumes on our platform.”
Vimeo
Vimeo announced it would cut 11% of its global full-time workforce, according to a January 4 regulatory filing.
adobe
Adobe has eliminated about 100 jobs, concentrated in sales. The company shifted some employees internally to other roles.
Himachal Pradesh
HP will cut more than 6,000 jobs over the next three years as declining demand for personal computers cuts into profits. Apart from reducing its workforce by around 10%, the company will reduce its real estate footprint.
that led to layoffs
*Fear of Recession:* Amid widespread caution about a global economic slowdown, IT companies are re-evaluating their spending and gearing up for a possible slowdown.
Many economists believe that a global recession is likely in 2023. The World Bank and the International Monetary Fund (IMF) have already warned economies to brace for a slowdown in growth.
Most of the World Economic Forum’s chief economists community expect to see geopolitical tensions shaping the global economy, and forecast further monetary tightening in the United States and Europe.
* Weak consumer demand: The world is facing major challenges from the beginning of 2022 in the form of high inflation and weak demand.
In the wake of the geopolitical crisis, consumer price inflation has shot up in almost every major economy in the world, be it US, UK, India, Japan, EU and others.
Its impact is being felt even more now as the global economy was already grappling with the pressure of Covid-related lockdowns since 2020. Just when the situation seemed to be slowly improving, the war between Russia and Ukraine made matters worse by disrupting a major trade route. ,
* Rapid rate increase: Persistently rising consumer prices forced central banks to tighten monetary policy from early 2022. After a long hiatus, almost all central banks started raising key interest rates.
Th US Federal Reserve was the first to raise rates from sub-zero levels and continues to do so. Central banks in other economies have also followed suit.
Even though the World Bank has warned economies against raising interest rates too quickly, it is considered important to contain rising inflation.
*Investor pressure: According to a Reuters report, Google’s headcount reduction follows pressure from investors to adopt a more aggressive strategy to curb spending.
In November, TCI Fund Management urged the Internet search giant in an open letter to publicly set a target for profit margins, increase share buybacks and reduce losses in its portfolio of other bets, Alphabet’s Moonshot division.
“The company has too many employees and the cost per employee is too high,” said Chris Haun, TCI’s managing director.
*Cost Cutting: Google has made a series of cost-cutting moves in recent months from canceling the next generation of its Pixelbook laptops and permanently shutting down its cloud gaming service Stadia.
Earlier in January Verily, a biotech unit of Alphabet, said it was cutting 15% of its workforce.
What Pichai said in the email
Alphabet CEO Sundar Pichai announced the job cuts to his employees through an email.
He said the company faced a different economic reality over the past two years when it rapidly expanded its workforce, for which Pichai said he took full responsibility.
“Over the last two years we have seen a period of dramatic growth,” Pichai wrote. “To match and fuel that growth, we’ve hired for a different economic reality than we have today.”
He said the layoffs reflect a “rigorous review” of its operations by Google.
“Jobs are being eliminated across all Alphabet, product areas, functions, levels and regions,” Pichai said. He said he was “deeply sorry” for the layoffs.
Google was gearing up to “share some completely new experiences for users, developers and businesses,” he said, and the company has “a substantial opportunity ahead of us with AI in our products.”
Pichai said that Google, founded nearly a quarter-century ago, was “bound to go through tough economic cycles.”
“These are critical moments to sharpen our focus, realign our cost base, and direct our talent and capital to our highest priorities,” he wrote.
google workers compensation
Fired employees at Google will receive 16 weeks of severance and 6 months of health benefits in the US, with packages based on local laws and practices in other regions.
Pichai said that the company will pay the employees during the full notification period of 60 days. Along with this, he will also get the bonus of 2022 and the rest of the leave time.
lay off beyond technology
The US corporate sector is already feeling the heat as fears of a recession loom large. Layoffs are not limited to IT sector only but financial, retail, energy, healthcare are also in the same boat.
Goldman Sachs began laying off staff on January 11 in a sweeping cost-cutting drive, with about a third of those affected coming from the investment banking and global markets division, a source familiar with the matter told Reuters.
Citigroup also eliminated dozens of jobs in its investment banking division, Bloomberg reported, as the bargaining slump continues at Wall Street’s biggest banks.
Meanwhile, vegetarian meat maker Blue Apron Holdings announced its plans to cut 200 jobs this year, with the layoffs expected to save about $39 million.
Pharma giant Johnson & Johnson has said it may cut some jobs amid inflationary pressures and a stronger dollar, with CFO Joseph Wolk saying the healthcare conglomerate is looking to “right size” itself.
The cryptocurrency exchange also said it would eliminate around 950 jobs, the third round of workforce reductions in less than a year after crypto, already squeezed by rising interest rates, collapsed major exchange FTX. After came under renewed pressure.
(with inputs from agencies)