Tech Giants Layoff Thousands

Last year’s labor markets dipped slightly, but they weren’t nearly as bad as they are now. The tech industry was without a doubt the exception to this downturn in jobs. After a massive hiring spree that took place in the first two years of the global pandemic, industry giants such as Meta and Amazon reversed that trajectory very fast in 2022/2023. In that time there were over 154,000 layoffs from over 1,000 total tech companies across the board last year.

Thousands of workers in the tech industry have now found themselves without employment, and the industry still continues to point to changing economic conditions as the issue at hand. Each tech giant has slightly different reasons for mass layoffs, and many of those companies are seeing the unequal distribution of layoffs across departments.

Amazon: In early January, Amazon’s CEO, Andy Jassy revealed that the company had plans to release nearly 18,000 of its employees. The cuts are under 1% of the global workforce but will add up to 6% of corporate jobs. According to the New York Times, an employee from the human resources sector at Amazon said that there were plans for mass layoffs first proposed in November. These mass layoffs were spurred by the increase in hiring that occurred as a result of the global pandemic. The company's workforce grew exponentially during this time from around 800,000 people in the final quarter of 2019 to 1.6 million in 2021.

Google Alphabet: Google, which is owned by Alphabet, announced that they were cutting roughly 12,000 jobs. Sundar Pichai, Google’s CEO, said in an email sent to the company that they will begin making layoffs in the U.S. immediately, and globally in the upcoming months. Alphabet has done a very solid job of keeping on Google’s large workforce, but they were required to make these significant cuts. 

Microsoft: On January 18th, Microsoft announced its plans to lay off over 10,000 jobs— around 4.5% of its 220,000-person workforce. The software company’s CFO, Satya Nadella, wrote in a Microsoft blog post that the software titan, which has a market value of $1.78 trillion, was heavily affected by the global economic downturn.

Netflix: Netflix announced that they were going to have two intense rounds of layoffs. In May, the streaming service eliminated 150 jobs after the company announced its first subscriber loss in over a decade. In June, it announced another 300 layoffs. Netflix said that they will continue to heavily invest in the business and the vision that Netflix has, but they needed to restructure some of their finances in order to move into the black for profit reasons.

Salesforce: Salesforce announced in early January as well that they had plans to lay off 10% of its 80,000-person workforce, which is around 8,000 employees. Due to slight economic downturns, online shoppers all around the world are being more continuous about what and how much they are purchasing, so this caused Salesforce to see a dip in their profits.

Spotify: The Swedish music streaming service said that they had plans to cut 6% of its global workforce, which was estimated to be upwards of 400 employees, and that was part of a management reshuffle. Spotify’s CEO, Daniel Ek, the employee cuts were part of a management reshuffle, “to bring our costs more in line.” Spotify’s operating costs doubled its revenue growth last year and these cuts are only going to improve that.

Vimeo: American video hosting company, Vimeo also launched a huge round of layoffs at the start of the year. The company’s layoffs affected nearly 11% of the company, across departments like sales, research, and development. Vimeo’s total employee tally was 1,219 workers in December 2021. In November 2022, Vimeo reported $108.1 million in revenue during the third quarter and roughly $1.6 million in paying subscribers. Vimeo’s CEO, Anjali Sud, said the “right thing to do to enable Vimeo to be a more focused and successful company, operating with the necessary discipline in an uncertain economic environment.”

Despite the alarming increase in job losses across the tech sector, these layoffs are hopefully just temporary, but they will continue to continue to occur and affect the markets.

By Avner Belsky