Tech job cuts – including mass layoffs at Meta and Twitter
A slew of tech companies have announced cost-cutting measures in 2022, with Amazon, Apple and Google-parent Alphabet all announcing hiring slowdowns or freezes.
For the tech sector, the pandemic boom turned into a post-pandemic meltdown, as rising interest rates drove stock prices down and inflation slashed earnings.
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.
The total number of job cuts announced by US-based employers jumped 13% to 33,843 in October, the highest since February 2021, according to a report.
Facebook’s parent company said in November it would cut 13% of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year as it grapples with an ad market low and rising costs.
Like its peers, Meta has been hiring aggressively during the pandemic to respond to an increase in social media usage by consumers stuck at home.
But the pandemic boom period petered out as advertisers and consumers stopped spending in the face of soaring costs and rapidly rising interest rates.
After sinking billions into CEO Mark Zuckerberg’s Metaverse vision with few results, Meta was faced with rising costs and shrinking profits.
Meta, once worth more than $1 trillion, lost about 70% of its value last year alone. Stocks rebounded in 2023 but remained below their early March peak.
“Not only has online commerce returned to earlier trends, but the macroeconomic slowdown, increased competition and loss of advertising signal has caused our revenue to decline from what I expected,” Zuckerberg said in a message to employees.
“I was wrong, and I take responsibility for it.”
On a brief call, a red-eyed Zuckerberg addressed the employees but did not answer any questions.
He stuck to a storyline that closely followed the wording of the morning blog post and called the increase in e-commerce investment a “big planning mistake.”
Twitter laid off half of its workforce in teams ranging from communications and content curation to product and engineering after Elon Musk’s $44 billion buyout.
The cuts affected about 3,700 employees, who learned of their fate by email last week.
In January, cloud-based software company Salesforce announced that it would lay off 10% of its employees, or around 8,000 workers.
CEO Marc Benioff cited a tough time for the tech sector as well as overhiring during COVID-19 that led to the decision.
“Our business performance process promotes accountability. Unfortunately, this may lead to some leaving the company, and we support them through their transition,” said a Salesforce spokesperson.
Salesforce had 73,541 employees at the start of last year – it’s the largest employer in the San Francisco area.
The company said in a filing in August that headcount had increased 36% over the past year “to meet increased demand for services from our customers.”
Amazon said it will lay off 18,000 business and technology jobs, which will be the biggest job cut in the company’s history.
The move comes as the company reportedly lost $1 trillion during the year after its stock fell from a high during the pandemic.
The move comes after the company implemented a hiring freeze, affecting key teams including Prime Video, Alexa and Amazon Fresh.
“We are facing an unusual macro environment and we want to balance our hiring and investing while thinking about this economy,” wrote Beth Galetti, senior vice president of people experience and technology at Amazon, in an article. memo.
Intel Corp CEO Pat Gelsinger told Reuters the “human actions” would be part of a cost-cutting plan.
The chipmaker recently said it would cut costs by $3 billion in 2023 and then increase them to $10 billion by 2025.
Adjustments would begin in the fourth quarter, Gelsinger said, but did not specify how many employees would be affected.
Some Intel divisions, including the sales and marketing group, could be cut by up to 20%, Bloomberg News reported last month, citing people with knowledge of the situation.
The company had 113,700 employees in July, when it cut its annual sales forecast by $11 billion after missing second-quarter earnings estimates.
Santa Clara, Calif.-based Intel declined to comment on the job cuts when contacted by DailyMail.com in October.
Intel has been battered by changing market trends, including the decline of traditional personal computers as smartphones and tablets gain popularity.
Last quarter, global PC shipments, including desktops and laptops, were down another 15% from a year ago, according to IDC.
Microsoft launched layoffs of 10,000 employees in January, citing slowing customer demand and a negative economic environment.
“We also see organizations across all sectors and regions treading cautiously as some parts of the world are in recession and others anticipate one,” CEO Satya Nadella said in a memo.
The layoffs affected nearly 5% of Microsoft’s global workforce.
Microsoft previously laid off fewer than 1,000 employees across multiple divisions last year, according to Axios.
In a statement, Microsoft executives said, “Like all companies, we regularly assess our business priorities and make structural adjustments accordingly.”
“We will continue to invest in our business and hire in key growth areas in the coming year.”
Microsoft executives previously announced in July that it was laying off less than 1% of its workforce and dramatically slowing hiring as its revenue fell short of investor expectations.
The company only recorded $51.9 billion in revenue during the second quarter of the year, but is expected to collect $52.4 billion.
It had previously experienced meteoric growth during the COVID pandemic, when consumers and businesses turned to its products as they shifted to a work-from-home model.
Ride-sharing company Lyft said it would lay off 13% of its workforce, or about 683 employees, after already cutting 60 jobs and freezing hiring in September.
Lyft said in a regulatory filing that it would likely incur between $27 million and $32 million in restructuring costs related to the layoffs.
“We are not immune to the realities of inflation and a slowing economy,” Lyft’s founders wrote in the memo to staffers.
The company’s stock price has fallen 76% year-to-date and was $9.75 on March 6, from nearly $45 in January 2022.
Lyft has about 4,000 employees, not including its drivers.
The music streaming service announced on January 22 that it plans to cut 6% of its workforce, or about 588 employees of its 9,800 full-time employees.
Spotify said it would incur approximately $38 million in severance costs.
The company, whose CEO is Daniel Ek, said its head of content and advertising, Dawn Ostroff, will also be leaving.
Although Apple has yet to announce any major layoffs, CEO Tim Cook told CBS Mornings that it is also slowing down some hiring.
“What we do as a result of being in this period is we are very deliberate in our hiring,” he said. “That means we’re still hiring, but we’re not hiring across the business.”
At the same time, however, Cook said “we don’t think you can save your way to prosperity.”
“We believe you are investing to achieve this,” he said.