Principal Takeaways
- Google has announced that it will be laying off 12,000 employees in 2023.
- A number of other tech companies were forced to lay off employees in 2022, and it appears that this trend will persist until 2023.
- The month of January has already seen the second-highest number of layoffs since the third quarter of 2020.There are still 11 days to go in the month.
- A lot of tech companies, in particular, were hired during the outbreak of lockdowns, during which online activity hit record highs across the globe.
Based on layoffs. For your information, there have been more than 40,474 tech jobs eliminated by 150 different businesses in January 2023. Apart from November 2022, when 52,135 people were cut, it’s the highest monthly number we’ve seen since the start of the third quarter of 2020.
This doesn’t even include the 12,000 people Google just announced today.
The list of businesses that are reducing their workforce includes numerous small businesses that are struggling; however, there are also a lot of large companies that rarely let employees go. The businesses that have had layoffs as of 2023 are WeWork, Microsoft, Amazon, Stitch Fix, Salesforce, Vimeo, ByteDance, Teladoc Health, Riot Games, Hootsuite, Carvana, CoSchedule, Crypto.com, Coinbase, Thinkific, Citrix, and, of course, Twitter.
So yeah, quite a few.
Let’s look at some of the most prominent names that are on this list and consider what this could mean for technology in the coming years.
Google plans to lay off 12,000 employees.
Google CEO Sundar Pichai announced this morning in an email that the company will begin laying off employees in the United States immediately.The cuts will also be implemented in other countries, but they will take longer because of “local rules and regulations.”
Staff laid off will be given 16 weeks of severance and two weeks of salary for every year they’ve been employed by the company.
As was often the case when layoffs were made public in the past, the Alphabet stock price surged upon the announcement, increasing an additional 4%.
This announcement isn’t surprising. The announcement isn’t surprising, considering that Google has recently introduced changes to their performance evaluation process that make it easy for workers to be placed in an “underperforming” category as well as harder to find their ways into the top performance category.
Microsoft has dismissed 10,000 of its employees.
On January 18, Satya Nadella, the CEO of Microsoft, announced that the company would be reducing its workforce by 10,000 employees. With an overall workforce of around 220,000, this is a reduction of 5 percent of the total workforce.
Nadella attributed the decrease in the number of employees to the changing economic climate and said, “We’re now seeing our customers maximise their digital spending to get more done with smaller.” Nadella’s company anticipates incurring a $1.2 billion cost for severance payments as well as lease consolidation and changes to its equipment.
This week, Microsoft will reveal its earnings report, but the expected growth will be much lower than prior years. Many speculate that the l reveal its earnings report, but the expected growth will be much lower than prior years. Many speculate that the 5% reduction in the workforce could indicate the possibility of more layoffs in 2023.
Salesforce cuts its workforce by 10 percent.
To address economic issues, B2B software giant Salesforce announced plans to reduce its workforce by 10%, or 8000 employees, as well as reduce its office footprint.
The co-CEO of the company, Marc Benioff, stated in an email to employees, “The environment remains challenging as our clients are adopting a cautious approach to purchasing.”
Similar to similar tech firms, revenue at Salesforce significantly increased during the outbreak when more people worked from home and heavily relied on technology to do remote work.
In his memo, Benioff said that the company might have hired too quickly at the time. In October, Salesforce employed nearly 80,000 people, up from 48,000 in the three years before.
Amazon is cutting 18,000 employees.
Then on Wednesday, hundreds of Amazon employees received an email from the company, informing them that their jobs were “eliminated” immediately.
The latest round of cuts caused the loss of around 18,000 workers, which was previously increased from the 10,000 figure set by Chief Executive Andy Jassy in November. Within a few hours of the emails being delivered, access to computers and offices for a lot of the employees was taken away, according to Business Insider.
The email from HR said, “Unfortunately, your job has been terminated.” You are no longer required to complete any tasks on Amazon’s behalf from the moment you receive them.
Stitch Fix replaces the CEO and reduces the workforce by 20 percent.
Personal styling online service Stitch Fix is going through significant changes. It has fired its CEO and is cutting its headcount by 20 percent.
The announcement shouldn’t be shocking considering the company’s recent financial performance. In thIn the year before, they announced they had lost 200,000 clients and incued net losses of $78 million.e year before, they announced they had lost 200,000 clients and incurred a net losses of $78m. This was an increase from the $18.8 million loss they suffered the previous year.
Stitch Fix’s founder and interim CEO announced in a blog post, “We are losing numerous talented team members across the business and I am deeply sorry.”
Coinbase is sending more employees out of the building as the crypto winter continues.
The crypto industry has been among the most impacted sectors during the recent market volatility, with the most famous blue-chip companies experiencing difficulties or, in the instance of FTX, totally falling in. Coinbase isn’t faring as poorly, but they’re far from immune to the effects.
Chief Executive Officer Brian Armstrong announced on the 10th of January that the company would be laying off another 1,000 employees in an effort to reduce operating expenses by 25 percent.
The move isn’t without cost, however, as severance plans and related expenses are estimated to cost the company about $150 million.
The cutbacks came after Coinbase had already cut 18% of their staff in June of last year.
“Dark times also support to eliminate poor companies, as we are witnessing right now.” Those of us who believe in crypto-currency, on the other hand, will continue to create amazing products and advance global economic liberty.”More prosperous times are coming, and when they do, we’ll be prepared.” Armstrong said in his statement.
Crypto.com Layoffs
The week before, another crypto giant announced significant reductions in their workforce, as well as Crypto.com providing the details of an increase of 20% in headcount.
Chief executive and co-founder Kris Marszalek posted on the blog of the company, saying that “We have grown in confidence at the beginning of 2022, leveraging our phenomenal growth and aligning with the direction of the wider business.” This trajectory rapidly changed as a result of the repercussions of economic trends.
The total number of staff at the cryptocurrency exchange is down to 4,000. This is the second round of reductions they’ve made. In June of last year, they announced the reduction of staffing by about 260 employees and an additional 22,000 between July and October.
Businesses like Coinbase and Crypto.com depend on trade volume to generate revenues. The volume of trading has dropped dramatically as the market has crashed, which has scared traders and investors away. The bottom line for numerous exchanges has taken a huge hit.
What do these layoffs mean to investors?
There’s no doubt that it’s been a challenging time for the technology sector. In the near term, it’s unlikely to change significantly. But it’s important to note that the fact that people are laid off isn’t necessarily a bad thing in the long run.
In contrast, many of the companies mentioned in the article witnessed their share prices rise following the announcement of the layoffs. For shareholders, this usually indicates that a company is trimming its fat and focusing on profit.
This could involve cutting down on businesses that aren’t producing and focusing on areas of marketing that have the greatest return on investment.
However, it’s difficult to determine which firms will emerge most resilient from the current turmoil.
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