Microsoft, Intel, Snap, and other big corporations have together laid off 45,000 workers

Companies in the IT sector have slowed their hiring efforts as they deal with slowing consumer spending, rising interest rates, and global economic uncertainty. Crunchbase News estimates that as of late October, 2022, over 45,000 people have been laid off from the IT industry in the United States. Some businesses have declared layoffs, while others have put a halt to all new hires. Both large and relatively unknown IT firms are included. Many of the businesses on the list saw remarkable growth because to the surge in internet spending that occurred during the epidemic. Over-hiring is a common complaint from top executives at these organisations. The following are examples of large technological firms that have recently reduced staffing levels or put a hold on new hires.

Last month, Seagate Technology, a manufacturer of hard drives, stated that it expects to lay off 8% of its worldwide staff, or around 3,000 people, due to economic uncertainties and decreased demand for its products. According to CEO Dave Mosley, customer hoarding of excess stock is affecting orders and dragging down Seagate’s financial performance. It was necessary to make sacrifices because of it. To “react to present market circumstances and boost long-term profitability,” we have acted swiftly and decisively, he added.

According to recent statements made by the company, Intel Corporation will reduce the number of positions it offers and will slow down its expenditure on new factories in an attempt to save $3 billion in the next year. The drop in staff is a reaction to the falling demand for the company’s consumer chips, which is the outcome of a dwindling market for personal computers (PCs). This decline comes at the same time as Intel is scheduled to receive billions of dollars in financing from the CHIPS Act, which is a bundle of US government legislation aiming to stimulate domestic chip manufacture. According to Bloomberg, the layoffs would strike Intel’s sales and marketing departments especially hard, hitting around 20 percent of the team members.

A Microsoft representative acknowledged layoffs were made last month because the software giant expects income to drop due to declining sales of Windows licences for personal computers. A Microsoft representative said, “Like all firms, we regularly analyse business goals and make structural modifications appropriately.” He also said, “In the year ahead, we will continue to invest in our company and employ in important growth areas.” In July, Microsoft reported laying off fewer than 1% of its workforce, thus this news comes three months after that report.

Virtually half of Twitter’s staff has been let go. On Friday, the world’s wealthiest man, Elon Musk, tweeted that the service had seen a “huge loss in income” as a result of the advertising exodus, capping a week of tumult and uncertainty about the company’s future under Musk’s ownership. Musk tweeted that the layoffs were necessary because “the firm is losing over $4M/day.” He also said that those who were let go will get three months’ worth of severance pay.

US-based The company cited an impending recession, the crypto winter, and its own excessively ambitious growth expectations as the reasons for the layoffs, which totaled around 1,100 employees, or 18% of its overall workforce. “I’ve communicated with everyone today that I’ve taken the difficult choice to cut the size of our workforce at Coinbase by around 18%. As a result of the widespread decline in the market, we need to pay more attention to expenses as we get closer to the onset of a possible recession “Brian Armstrong, who is also the CEO of Coinbase and a co-founder of the company, stated.

Netflix, the pioneering business in the TV streaming industry, grew rapidly for many years. But 2022 has been a difficult year for the firm. Two waves of layoffs have occurred at Netflix this year. A pair of events, the first in May and the second in June. Roughly 500 workers have been let go by the firm.

Snap CEO Evan Spiegel said in a late August message to employees that the firm will be laying off 20% of its staff, or more than 1,000 people. Spiegel said that the big reorganisation was required to “guarantee Snap’s long-term viability in whatever climate,” citing the company’s gloomy projected revenue growth. Since March of 2020, the business has almost doubled in size. Adapting to the market conditions and dealing with the fallout from slower revenue growth are now imperatives, Spiegel added. Snap has known for some time that its time is up. After seeing its shares drop almost 40% in a single day, the firm said it would freeze recruiting.

Shopify CEO Tobi Lutke revealed in July that the firm will be laying off around 10% of its workforce, or about 1,000 people. The surge in online shopping during Covid was very beneficial to Shopify. Shopify, following the trend of other businesses, embarked on a recruiting binge. It was “ultimately my decision to make” to place the bet, and “I got this wrong,” Lutke said. We have to make some changes now. Unfortunately, this means that we will have to say goodbye to some of you today.

Lyft, a ride-hailing startup located in San Francisco, California, said earlier this month that it will lay off 13% of its staff, or around 700 people, in an effort to slash costs in light of the slowing economy. The newest move by Lyft is projected to cost the company between $27 and $32 million in the last quarter of the year. It follows a September hiring moratorium and 60 job layoffs made earlier this year.

Stripe has stated that it would be laying off 14% of its personnel, which will affect around 1,120 employees out of the company’s total workforce of 8,000. In a message that was made public on the internet, Stripe CEO Patrick Collison cited a huge hiring binge owing to a jump in revenues during a pandemic, an economic slowdown afflicted with inflation, and other macroeconomic issues as the reasons for the expansion of the company. Collison stated in an email that the company had “overhired for the world we’re in,” and that “it saddens us to be unable to give the experience that we thought that individuals affected would have at Stripe.”

In a blog post earlier this month, Opendoor co-founder and CEO Eric Wu stated that the firm will be laying off around 550 individuals, or 18% of the workforce across all departments. Before today, we reduced our capacity by over 830 jobs, mostly via decreased use of external resources, and we avoided millions of dollars in fixed costs. In order to carry out its goal for the foreseeable future, the team has made the difficult choice to reduce their headcount today.

Published at : 07 Nov 2022 09:52 AM (IST)

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