The spate of layoffs at big technology companies continue with Yahoo being the latest to join the list. The slump in the economy, higher interest rates, inflation, over hiring in the past are all factors that have forced tech companies to resort to these drastic measures.
Yahoo is the latest to join the long list of companies that resorted to mass layoffs in recent times with plans to lay off over 20 per cent of its total workforce. The company said that the decision was owing to a major restructuring in its ad tech division. Let’s take a look at the recent layoffs announced by tech companies.
Yahoo lays off 20 per cent staff
The US-based web service provider on Thursday announced that its plans to lay off over 20 per cent of its total workforce. The company said that the decision was owing to a major restructuring in its ad tech division.
The Apollo Global Management-owned company added that layoffs will equip the company to focus on its flagship ad business DSP which is an abbreviation for demand-side platforms. Yahoo’s decision is an outcome of ad companies reducing their marketing budgets in the wake of the uncertainty about a looming recession.
Microsoft and workforce restructuring
Microsoft on Friday announced that it was implementing the layoff of 10,000 workers that it announced in January. The latest layoffs will impact divisions such as Surface devices, HoloLens, mixed reality hardware, and Xbox. The job cuts at the HoloLens hardware team raised doubts about the launch of the third edition of its goggles which was planned for the US Army.
In November 2022, tech giant Microsoft announced that it was laying off 10,000 employees, about 5 per cent of its total workforce, in an effort to mitigate the slow revenue growth. Following the announcement, the company’s shares witnessed a marginal rise in the US. The workforce restructuring is expected for teams across geographies. Marketing and sales departments are more likely to bear the brunt of the layoffs. “I’m confident that Microsoft will emerge from this stronger and more competitive,” CEO Satya Nadella told Microsoft employees via a memo that was later shared on the company’s website.
Most of the layoffs among tech companies in the US came after a steep hike in the demand for cloud computing and collaboration services. This was mostly due to government agencies and enterprises embracing remote work owing to the outbreak of the Covid-19 pandemic. Months later, rising prices and economic uncertainty led companies to practice caution when it came to investing in technology. Resultantly, the prospects of numerous tech stocks were dampened.
Disney’s cost-cut drives
The mass media and entertainment company, Disney, on February 9 announced that it was planning to lay off 7,000 staff in a bid to cut costs across the organization. Disney said that the move was part of its plans to reorganize its work structure. The layoffs were announced moments after the media company revealed its recent quarterly earnings. The move, similar to most tech companies, was seen as a measure taken amidst a challenging economic environment.
An official release by Disney about its quarterly earnings also indicated a slowdown in its subscriber growth similar to rival Netflix. “I do not make this decision lightly. I have enormous respect and appreciation for the talent and dedication of our employees worldwide,” CEO Robert Iger said following the announcement.
Dell focuses on driving efficiency
Dell Technologies on February 7 announced that it will be eliminating 6,650 jobs. The decision according to the company was an outcome of the rapidly declining demand for personal computers. Co-Chief Operating Officer Jeff Clarke in a memo to staff said that the company was facing market conditions that ‘continue to erode with an uncertain future’. The latest reduction in staff amounts to around 5 per cent of the company’s global workforce.
The company views staff reduction and department restructuring as an opportunity to drive efficiency. “We’ve navigated economic downturns before and we’ve emerged stronger. We will be ready when the market rebounds,” Clarke wrote in his note to employees.
Pay cuts and layoffs at Intel
Chipmaker Intel, which recorded a decline in its revenue by 32 per cent in the fourth quarter, announced pay cuts for executives and managers. The poor results in the fourth quarter have forced the company to make significant changes in compensation. On January 23, it was reported that the company had laid off 340 employees in the US. In its statement, the company termed it a ‘difficult decision’ adding that the company was committed to treating impacted staff with dignity.
Google’s Mass Layoff
On January 20, Alphabet.Inc’s Google said that it would be laying off over 12,000 staff. CEO Sundar Pichai in an email to the employees said that the company will be laying off employees in the US immediately. He said that the layoffs may take longer in other countries owing to local laws and practices. In the run-up to the announcement, it was reported that Google’s staff were afraid of mass layoffs, in view of the company’s dwindling performance ratings and significant progress made by its competitors. The declaration led to Google shares closing up over 5 per cent.
Amazon’s Second Round of Layoffs
E-commerce giant Amazon, which began laying off its staff in November 2022, announced its second round of layoffs on January 18. The wave of layoffs came days after CEO Andy Jassy announced that the company would engage in layoffs that would impact over 18,000 employees in its stores and human resources division. This is the biggest job cut in the company’s 28-year-long history. CNBC had earlier reported that Amazon was considering slashing 10,000 jobs in November last year. Reportedly, the latest round of layoffs was due to its over-hiring during the pandemic. Amazon’s workforce increased to over 1.6 million by the end of 2021, a stark rise from the 7,98,000 in Q4 of 2019. The company was reportedly grappling with declining sales, increasing expenses, and an overall economic slump.
On Friday it was reported that Meta Platforms Inc. reportedly asked its managers and directors to either transition into individual contributor jobs or leave the company. According to those familiar with the development, the new move is known internally as a ‘flattening’ measure.
In November last year, Facebook’s parent company Meta announced that it would be slashing over 11,000 jobs, which is 13 per cent of its total workforce. Following the announcement, Meta CEO Mark Zuckerberg said that he took accountability for the decision, also admitting that the company had been overhired during Covid-19. Experts are anticipating more layoffs from Meta in 2023. While talking about Meta’s recently released fourth-quarter earnings, Zuckerberg said that the management is focused on becoming a stronger and more ‘nimble’ organization.
After SpaceX chief Elon Musk took over the microblogging site, he laid off nearly 50 per cent of the company’s workforce which is around 7,500. Apart from layoffs, many employees quit after Musk’s takeover. It was also reported that Twitter sacked over 4,000 contract workers without notice. At present, several reports are doing the rounds on the internet suggesting that there may be more layoffs at Twitter in the coming months.