Tech layoffs in 2023: a growing trend among major companies
The tech industry has seen a significant number of layoffs in the beginning of 2023, as companies continue to adjust to the economic challenges of the Covid-19 pandemic. Waning demand and weaker revenue have forced many major employers to scale back payrolls and institute hiring freezes in 2022, and that trend has continued into the new year.
The job cuts have been concentrated in the tech industry and have included major players such as Facebook parent Meta Platforms Inc., Twitter Inc., Google parent Alphabet Inc., Microsoft Corp. and International Business Machines Corp. The slowdown in the tech industry has also started to reverberate on Wall Street, where revenue for tech-related deals has fallen off.
The broader labor market has continued to add jobs, but growth has slowed. Employers added 223,000 jobs in December and the unemployment rate fell to 3.5%. Here is a closer look at some of the companies that have announced layoffs in the tech industry:
1. Alphabet
The Google parent company announced plans to eliminate roughly 12,000 jobs, reducing its staff by 6% and marking the company’s largest-ever round of layoffs as it copes with a darkened economic outlook. The reductions will cut across Alphabet units and geographies, the company said, though some areas, including recruiting and projects outside of the company’s core businesses, would be more heavily affected.
2. Amazon
Amazon.com Inc. is laying off more than 18,000 employees concentrated in its corporate ranks. The company said last year it was planning job reductions after more customers began returning to bricks-and-mortar stores and have begun spending less money online.
3. IBM
IBM announced it would cut about 3,900 jobs, reducing its head count by about 1.4%. The cuts stem from its spinoff of Kyndryl Holdings Inc. and healthcare divestiture, from which the company will incur about a $300 million charge, a spokesman said. The layoffs come as IBM posted flat sales in the fourth quarter after the strong U.S. dollar hurt its reported revenue.
4. Microsoft
Microsoft said it was laying off 10,000 employees, which would affect less than 5% of the company’s global workforce, according to Chief Executive Satya Nadella in a blog post. Nadella cited “organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.”
5. Salesforce
Salesforce Inc. said it would cut 10% of its staff. Salesforce Co-CEO Marc Benioff said the company overhired at the start of the pandemic and now faced sluggish demand from customers who were cutting back on spending.
6. Spotify
Spotify Technology SA plans to cut its workforce by about 6% as part of broader cost-saving measures, CEO Daniel Ek said in a note to staff. “Over the last few months we’ve made a considerable effort to rein-in costs, but it simply hasn’t been enough,” Ek said. “So while it is clear this path is the right one for Spotify, it doesn’t make it any easier.”
7. Unity Software
Unity Software Inc. said it would eliminate 284 jobs. Some of those losing their jobs may be rehired for other positions if they apply for openings, the San Francisco-based company said. Unity, a provider of tools for creating videogames and other applications, previously disclosed layoffs in June. Unity had more than 8,000 employees before its most recent round of cuts.
The company stated that the layoffs were a result of the ongoing economic uncertainty caused by the pandemic and a shift in the industry towards remote work. Despite the layoffs, Unity remains committed to its core business of providing tools for game and application development, and will continue to invest in research and development in order to stay competitive in the market.
8. Verily
Verily Life Sciences, a healthcare unit of Alphabet, is laying off more than 200 employees as part of a broader reorganization. The cuts will affect about 15% of roles at Verily, which has more than 1,600 employees. The company will discontinue work on a medical-software program called Verily Value Suite and several early-stage products, CEO Stephen Gillett said in an email to employees. The layoffs are a part of Verily’s efforts to focus on its core business of healthcare and wellness, and to streamline its operations in order to better serve its customers. Despite the layoffs, Verily will continue to innovate and develop new products in order to improve the lives of patients around the world.
9. Vimeo
Vimeo Inc., a video-sharing platform, said it would lay off 11% of its staff. The company said it was making the cuts amid slowing economic growth, including high interest rates and global recession fears. The video-sharing platform has seen a decline in revenue due to the economic downturn, and has had to make the difficult decision to lay off employees in order to stay financially stable. Despite the layoffs, Vimeo remains committed to providing high-quality video content and will continue to innovate and improve its platform in order to better serve its users.
10. Coinbase
Coinbase Global Inc. said that it would eliminate around 20% of its staff and enact broad cost cuts, the latest sign of pain in the cryptocurrency industry. The cryptocurrency exchange will reduce operating expenses by 25% from the previous quarter, including laying off about 950 people. At the end of September, the company had around 4,700 employees. Rival exchange FTX’s collapse has sparked a fresh round of layoffs across the crypto industry. In a blog post explaining the layoffs, CEO Brian Armstrong cited “the fallout from unscrupulous actors in the industry, and there could still be further contagion.”
The layoffs at Coinbase are a result of the ongoing volatility and uncertainty in the cryptocurrency market, as well as the fallout from the collapse of rival exchange FTX. Despite the layoffs, Coinbase remains committed to providing a safe and secure platform for buying and selling cryptocurrency, and will continue to invest in research and development in order to stay competitive in the market.
11. Crypto.com
Crypto.com is cutting 20% of its global workforce in a second round of layoffs in six months. In a blog post, the cryptocurrency exchange’s co-founder and chief executive officer, Kris Marszalek, didn’t specify how many employees were laid off. Several hundred individuals found out on the day of the announcement that they no longer had access to Crypto.
12. Genesis
Crypto lender Genesis Global Trading Inc. laid off 30% of its staff and then filed for bankruptcy protection. The layoffs weren’t confined to one department and were across the company, the Journal reported, citing people familiar with the matter. Genesis has 145 employees left after the recent layoffs. Roughly two weeks after the layoff announcement, the New-York based firm filed for bankruptcy protection alongside two of its subsidiaries. This is a clear indication of the struggles that the cryptocurrency industry is facing as a whole, with many companies facing financial difficulties and struggling to stay afloat.
Conclusion
In conclusion, the beginning of 2023 has seen several tech companies conduct layoffs as they continue to recalibrate after the rapid growth experienced during the Covid-19 pandemic. Companies such as Alphabet, Amazon, IBM, Microsoft, and many more have all announced layoffs. The job cuts have been concentrated in the tech industry and have been caused by a slowdown in demand and weaker revenue.
This has not only affected the tech industry but also Wall Street where revenue for tech-related deals has fallen off. While the broader labor market has continued to add jobs, growth has slowed, and employers added 223,000 jobs in December, the unemployment rate fell to 3.5%. This is a clear indication of the ongoing struggles that the economy is facing and the need for companies to adjust and adapt to the current market conditions.
