Tech Companies Continue to Reduce Jobs in Uncertain 2023 Economy
(Bloomberg). Layoffs that started in 2022 are increasing across a lot of the technology industry.
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Tech industry jobs are being cut at a rate that is approaching the Covid-19 pandemic’s early days. In November, the most recent month for which data is available, the sector announced 52,771 cuts, for a total of 80,978 over the course of the year, according to consulting firm Challenger, Gray & Christmas Inc. It was the industry’s highest monthly total since 2000 when data began to be kept. Many companies are now facing volatile cryptocurrency markets and sudden drops in demand.
After a slow start to the 2020 pandemic, tech companies saw a surge in e-commerce spending, remote work boomed, and this triggered a hiring frenzy. These days, things are different. Recent earnings reports revealed that Alphabet Inc. Meta Platforms Inc., Microsoft Corp., and other companies missed estimates, sending shares plummeting.
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Here’s a running list of who’s cutting jobs and pulling back on hiring.
Adobe
Adobe Inc. has cut about 100 jobs in the sales sector. Some employees were transferred to new roles within the company.
Amazon
Andy Jassy, chief executive officer of e-commerce giant Amazon, announced that 18,000 employees would be laid off. The cuts, which started last year, were initially expected to affect about 10,000 jobs.“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy said. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”
In November, Amazon halted “new incremental” hiring across its corporate workforce.
Apple
According to sources familiar with the matter, the iPhone maker has stopped hiring for jobs other than research and development. This is an increase in its plan to cut budgets heading into the new year. The break generally doesn’t apply to teams working on future devices and long-term initiatives, but it affects some corporate functions and standard hardware and software engineering roles.
Chime
Chime Financial Inc. will be laying off 12% of its 160 employees. A spokesperson said the company remains well-capitalized and the move will position it for “sustained success.”
Cisco
Cisco Systems Inc. will begin a restructuring process that will impact approximately 5% employees. According to the company, it will be subject to pretax charges totaling $600 million for terminations, severance and other costs. Scott Herren, chief financial officer, said that employees will be offered the chance to change jobs within the company.
“This is not about reducing our workforce — in fact we’ll have roughly the same number of employees at the end of this fiscal year as we had when we started,” Herren said. Cisco had 83,000 employees at the end of July.
Coinbase
Coinbase Global Inc. has eliminated 60 positions due to the market crash. In June, the crypto exchange announced that it would be laying off 18% of its workforce. This is roughly 1200 employees.
Dapper Labs
Roham Gharegozlou, founder of Dapper Labs Inc. and CEO, stated in a letter sent to employees that 22% had been laid off. He cited macroeconomic conditions and operational challenges stemming from the company’s rapid growth. Dapper Labs has created the NBA Top Shot marketplace to trade nonfungible tokens. This digital asset class has seen a sharp drop in demand following the downturn in the crypto market.
Digital Currency Group
Digital Currency Group, a cryptocurrency conglomerate, underwent a restructuring process that saw 10 employees leave the company. Mark Murphy was promoted from chief operating officer to president as part of the restructuring.
DoorDash
DoorDash Inc. will reduce about 1,250 jobs after acknowledging its rapid growth during the pandemic. The cuts will affect about 6% of the company’s workforce, a mix of US and non-US based staff, according to reporting by Bloomberg.
“While our business continues to grow fast, given how quickly we hired, our operating expenses — if left unabated — would continue to outgrow our revenue,” CEO Tony Xu wrote in a letter to staff.
Galaxy Digital
Galaxy Digital Holdings Ltd. is a crypto financial services company founded by Michael Novogratz. It may be looking at eliminating up to 20% of its workforce. According to sources familiar with the matter, the plan could still be modified and the final number could range from 15% to 20%. Galaxy’s shares have plummeted more than 80% in the past year, part of a rout for cryptocurrencies.
Genesis
Genesis Global Trading Inc. has laid off 60 employees in its latest round of job cuts, or about 30% of the crypto brokerage’s workforce. There are currently 145 employees.
HP
HP Inc. may eliminate as many as 6 000 jobs in the next 3 years due to declining personal computer demand. HP Inc. will not only reduce its workforce by 10% but also decrease its real estate footprint.
Intel
Intel Corp. announced that it is cutting jobs and slowing down spending on new plants to save $3 billion. Investors liked the plan, which was approved by them and sent their shares up over 10% Oct. 28. Bloomberg News reported that the headcount reduction could reach into the thousands.
Kraken
As the fallout from the meltdown in the digital-asset markets worsens, Kraken, a crypto exchange, is cutting 30% of its workforce. The reductions affect about 1,100 employees.
Lyft
Lyft Inc.’s cost-saving efforts include divesting its vehicle service business. It’s eliminating 13% of staff, or about 683 people. The company previously said that it would not allow hiring in the US after the new year. It’s now facing even stiffer 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 2023 to be a period where we can better execute without having to change plans in response to external events — and the tough reality is that today’s actions set us up to do that.”
Meta
The Facebook parent is cutting 11,000 jobs, the first major round of layoffs in the social-media company’s history. Meta’s stock has plunged in the past year, and the company is trying to pare costs following several quarters of disappointing earnings and a slide in revenue. Meta will keep its hiring freeze in place through the first quarter.
“I want to take accountability for these decisions and for how we got here,” CEO Mark Zuckerberg said in the statement. “I know this is tough for everyone, and I’m especially sorry to those impacted.”
Opendoor
Opendoor Technologies Inc. said that it’s laying off about 550 employees — roughly 18% of its headcount. The company employs a data-driven home-flipping strategy called iBuying and is struggling to keep up with the rising mortgage rates.
Peloton
Peloton Interactive Inc. fired 500 people worldwide, representing about 12% of its workforce, in October. This was the fourth reduction in staff the company had made over the last year. Peloton also stated that other cost-cutting measures would be taken. The move will allow the company to reach the breakeven point in cash flow by fiscal 2023.
“I know many of you will feel angry, frustrated and emotionally drained by today’s news, but please know this is a necessary step if we are going to save Peloton, and we are,” CEO Barry McCarthy said in an October memo. “Our goal is to control our own destiny and assure the future viability of the business.”
Plaid
Plaid Inc. has cut 260 employees to lower costs. In a memo to employees, CEO Zach Perret stated that the fintech company would provide 16 weeks of severance for certain employees and accelerate equity grants.
Qualcomm
Qualcomm Inc. said that it’s frozen hiring in response to a faster-than-feared decline in demand for phones, which use its chips. It now anticipates that smartphone shipments will fall by at least two-digit percent this year, which is worse than its earlier outlook.
Salesforce
A regulatory filing from January 4 stated that Salesforce would reduce its workforce by about 10% and its real estate holdings. CEO Marc Benioff said in a letter to employees, “We hired too many people” during the pandemic. The company employed approximately 80,000 people. Slack, Tableau, and Mulesoft employees were among those affected by the cuts. These businesses were acquired by Salesforce in recent years.
Seagate
Seagate Technology Holdings Plc, the biggest maker of computer hard drives, said that it’s paring about 3,000 jobs. A slowdown in hardware spending has had a devastating effect on computer suppliers such as Seagate and Intel. Customers are sitting on a pile of extra inventory, hurting orders and weighing on Seagate’s financial performance, CEO Dave Mosley said. These sales have forced Seagate to make cuts. “We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability,” he said.
Silvergate
Silvergate Capital Corp., a cryptocurrency bank, announced that it will fire 40% of its staff following customers withdrawing $8.1 billion in digital assets during the fourth-quarter.
Stitch Fix
Stitch Fix Inc. is cutting 20% of its salaried staff to keep the company’s sales growth. It will also close its Salt Lake City distribution office.
Stripe
Payments company Stripe Inc., one of the world’s most valuable startups, is cutting more than 1,000 jobs. The 14% staff reduction will return its headcount to almost 7,000 — its total in February. Co-founders Patrick and John Collison told staff that they need to trim expenses more broadly as they prepare for “leaner times.”
The upheaval at Twitter has more to do with its recent buyout — and the accompanying debt — than economic concerns. However, the company is suffering some of the most severe cuts among its peers. Elon Musk bought Twitter for $44billion and eliminated around 3,700 jobs through email. Musk also reversed the company’s work-from-anywhere policy, asking remaining employees to report to offices.
“Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day,” Musk tweeted on Nov. 4.
Start
Upstart Holdings Inc., an online lending platform, said in a regulatory filing it cut 140 hourly employees “given the challenging economy and reduction in the volume of loans on our platform.”
Vimeo
Vimeo Inc. announced that it would reduce 11% of its global full time workforce according to a regulatory filing filed Jan. 4.
(Updates from Genesis, Silvergate and Stitch Fix.
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