Over the past few weeks, top tech firms located in the Silicon Valley have laid off over 20,000 employees across the globe. From Twitter to Meta, the big tech companies have sacked thousands of employees or have frozen hirings as they are anticipating troubled times ahead. Technology companies, which are seen as big spenders, are now adopting cost-cutting measures with slowdown woes growing.
Why tech companies are sacking employees
After the Covid pandemic, the tech firms and start-ups were on a hiring spree as they witnessed a massive rise in demand. However, the companies are now coming off a period of outsized growth and are on a self-correction mode, according to analysts. Macroeconomic factors such as the Ukraine-Russia war combined with high inflation, declining consumer demands, and recession threat have dampened their spirit. This also signals that more tech firms might tighten their belt and let go of more employees in the coming weeks.
Here is a list of companies that have laid off or are planning to terminate employees:
Amazon
Amazon, which announced a pause on its corporate hiring, is now planning to lay off nearly 10,000 people in corporate and technology jobs starting as soon as this week, as reported by PTI. “Amazon froze hiring in several smaller teams in September. In October, it stopped filling more than 10,000 open roles in its core retail business. Two weeks ago, it froze corporate hiring across the company, including its Cloud computing division, for the next few months. That news came so suddenly that recruiters did not receive talking points for job candidates until almost a week later, according to a copy of the talking points seen by The New York Times,” it said. It is still unclear whether the layoffs will be limited to only the US or affect other markets as well. Currently, Amazon employs 1.5 million people worldwide.
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Meta
Meta, the parent firm of Facebook, said that the company is laying off more than 11,000 employees, which is 13 per cent of its total workforce, after a steep slide in digital ad revenue and profit. Meta CEO Mark Zuckerberg said. According to Wall Street Journal, in his latest meeting with senior executives, Zuckerberg is said to have confirmed "broad cuts" across the company, starting from Wednesday. Employees who lose their jobs would be provided at least four months of salary as a severance, the report said. The mass layoff is the first broad head-count reduction to occur in Meta's (earlier Facebook) 18-year history. The Facebook and Instagram parent firm reported over 87,000 employees (as of September).
World’s richest person, Elon Musk, after taking charge of Twitter has fired about 50 per cent of Twitter workforce, or about 3,800 employees. When Tesla CEO acquired Twitter, layoffs were expected, but the manner in which they have been carried out has evoked criticism. Musk fired Twitter CEO Parag Agrawal, CFO Ned Segal, and Twitter’s head of legal, trust, and safety Vijaya Gadde. This was followed by mass layoffs on November 4, with Twitter employees being sent an email that informed them of the upcoming job cuts.
Sundar Pichai, chief executive officer (CEO) of Alphabet, the parent firm of Google, has said that his company is planning to scale down the rate of hiring in Q4 of 2022 and for 2023 as the tech giant’s Q3 revenue grew at its slowest pace in more than two years, reported by CNBC. He stressed on some cost-cutting measures across the company, citing economic challenges, including a potential recession, soaring inflation, rising interest rates, and tempered ad spending.
Apple
While Apple has not announced any job cuts, the company has slowed down hiring. In a new CBS interview, Apple CEO Tim Cook said the company was not hiring “everywhere in the company,” and was being “very deliberate” on its hiring process.
Intel
US chipmaker Intel Corp is planning a major reduction in headcount, likely numbering in the thousands, as reported by Bloomberg. According to the report, the layoffs will happen in some of Intel’s divisions, including the sales and marketing group, could see cuts affecting about 20 per cent of staff. Intel Corp had 113,700 employees as of July, Bloomberg News said. The chipmaker in July slashed its annual sales and profit forecasts after missing estimates for second-quarter results.
Snap
Snapchat’s parent firm, Snap, was one of the first social media companies to announce layoffs. The firm cut around 20 per cent of its workforce in August. The total headcount at Snap was around 6,400 before the layoffs. The development comes as technology firms, crypto exchanges, and financial firms cut jobs, and slow hiring as global economic growth slows due to higher interest rates, red-hot inflation, and an energy crisis in Europe.
Byju’s and Unacademy
In India, companies such as Byju’s and Unacademy have also sacked several employees. India’s most valued start-up Byju’s laid off 2500 employees.
Sana Afreen, CCO and assistant director of program management, Rizzle, said, “The layoffs result from multiple factors, including global economic conditions, budgets, and company runway. The threat of a recession is causing scale-back on spending, which means companies will be looking to trim costs where they can; hence, we see unprecedented times. Tech companies are coming off a period of outsized growth spurred by the pandemic. What's happening now is something of a correction in the industry.”