Google Cuts Add to Tech Wipeout That’s Claimed Over 100,000 Jobs (From Bloomberg) [3 Articles] (9 CNN Images)
~ Saturday, January 21, 2023 Blog Post ~
The on-going massive layoffs in the technology industry is just awful. I heard about the related developments on Google today on CNN.
By Saksha Menezes and Lindsey Rupp, January 20, 2023
Here’s a running list of the technology companies planning layoffs
Alphabet Inc.’s plan to reduce headcount by more than 6% — about 12,000 roles — is adding to mass job cuts that are accelerating at technology companies around the world.
The tech sector announced 97,171 job cuts in 2022, up 649% compared to the previous year, according to consulting firm Challenger, Gray & Christmas Inc. Disclosures about cuts at Google’s parent company, Microsoft Corp., and Amazon.com Inc. have added another 30,000 positions in January.
Big tech companies like these benefited from a boom in e-commerce spending and remote work that kicked off during the Covid-19 pandemic lockdowns in 2020. Now, many of these businesses are reporting disappointing growth rates and dealing with sagging share prices as customer behavior returns to normal. Their leaders are saying they expanded too quickly, with Alphabet Chief Executive Officer Sundar Pichai writing that he takes “full responsibility for the decisions that led us here,’’ in an email to employees on Friday.
Here’s a running list of who’s cutting jobs and pulling back on hiring.
Alphabet
Google parent Alphabet announced it will cut about 12,000 jobs, more than 6% of its global workforce, in a move that will affect roles across the company.
The company had in October reported third-quarter earnings and revenue that missed analysts’ expectations, with profit dropping 27% from a year earlier. Investors began to pressure the search giant to adopt a more aggressive strategy to curb spending. TCI Fund Management Ltd. urged the company to set a target for profit margins, increase share buybacks and reduce losses in its portfolio, noting Alphabet’s headcount has swelled 20% per year since 2017.
Amazon
The e-commerce titan is laying off 18,000 employees, CEO Andy Jassy announced on Jan. 4. The cuts, which started last year, were initially expected to affect about 10,000 jobs.
“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy said. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”
In November, Amazon halted “new incremental” hiring across its corporate workforce.
Blockchain.com
Crypto platform is letting go of 28% of its workforce, around 110 employees, in its latest round of layoffs, announced early January.
Capital One
Capital One Financial Corp. eliminated hundreds of technology positions this week with more than 1,100 workers affected, according to a person familiar with the matter.
Coinbase
Coinbase Global Inc. is eliminating 60 positions as the cryptocurrency market slumps. The crypto exchange announced in June it would lay off 18% of its workforce, or roughly 1,200 employees.
ConsenSys
Ethereum software company ConsenSys confirmed it is eliminating 96 positions, representing 11% of the crypo firm’s total workforce.
Crypto.com
Crypto.com plans to cut about 20% of its global workforce, the company announced Jan. 13. The company didn’t respond to media requests for the specific number of jobs eliminated at the time. Kris Marszalek, the firm’s chief executive officer, said the cuts would help “position the company for long-term success.”
Genesis
Genesis Global Trading Inc. has laid off 60 employees in its latest round of job cuts, or about 30% of the crypto brokerage’s workforce. The company now has 145 employees remaining.
Huobi
The crypto exchange announced this month it’s cutting 20% of its 1,100 employees.
Microsoft
Microsoft said it will cut 10,000 jobs this year, or about 5% of its workforce, which will result in a $1.2 billion charge in the fiscal second quarter. CEO Officer Satya Nadella said in a blog post and internal email to employees on Jan. 18 that the company will continue to hire in “key strategic areas.” Nadella, speaking at the World Economic Forum in Davos, Switzerland, said the tech industry needs to adjust to the broader economic slowdown.
The mass layoffs extended to its video-game division, including developers at hit titles Starfield and Halo. The scale of the cuts in the gaming division are not clear.
“During the pandemic there was rapid acceleration. I think we’re going to go through a phase today where there is some amount of normalization in demand. We will have to do more with less — we will have to show our own productivity gains with our own technology.”
Salesforce
Salesforce will cut about 10% of its workforce and reduce its real estate holdings, according to a regulatory filing on Jan. 4. CEO Marc Benioff said in a letter to employees, “We hired too many people” during the pandemic. The software company had about 80,000 employees. The cutbacks included staff at Slack, Tableau and Mulesoft, businesses that Salesforce acquired in recent years.
Silvergate
Silvergate Capital Corp., a crypto bank, said in January it is firing 40% of its staff after customers withdrew $8.1 billion worth of digital assets during the fourth quarter.
Sharechat
Social media platform ShareChat is cutting more than 500 jobs to reduce costs, according to a spokesman.
Stitch Fix
Stitch Fix Inc. will cut about 20% of salaried employees as the personal-styling platform struggles to maintain the sales growth it saw during the pandemic. The company will also close its Salt Lake City distribution center.
The upheaval at Twitter has more to do with its recent buyout — and the accompanying debt — than economic concerns. But the company has suffered some of the deepest cuts of its peers right now. After Elon Musk, who bought Twitter for $44 billion, eliminated about 3,700 jobs by email in November, cuts have continued in January, particularly those overseeing global content moderation.
Unity Software
Unity Software Inc. is cutting 284 jobs, its second round of downsizing in less than a year amid a broad tech-industry retrenchment.
Vimeo
Vimeo Inc. announced it will cut 11% of its global full-time workforce, according to a Jan. 4 regulatory filing.
©2023 Bloomberg L.P.
Article #2: Microsoft layoffs suggest broader pain to come for the economy
The tech giant is the latest company to fire workers after growing rapidly during the pandemic
By Jacob Bogage, Hamza Shaban and Taylor Telford, January 18, 2023
Microsoft joined legions of tech companies that have been trimming staff in recent moves, announcing layoffs of 10,000 employees Wednesday as part of a restructuring intended to brace the company for a potential economic downturn.
The tech giant is the latest to cut workers amid economic uncertainty that has taken a heavy toll on the tech, finance, media and housing sectors, as higher interest rates continue to weigh on the broader economy. Microsoft’s revenue largely comes from cloud computing and widely used software such as Word and PowerPoint and the Windows operating system, making it particularly plugged in to larger trends in the business world.
“Microsoft laying off is a canary in the coal mine for the broader economy,” said Dan Ives, managing director at Wedbush Securities. “And I think it shows that enterprises are starting to slow spending, with a mild recession likely on the doorstep.”
Other worrisome signs emerged Wednesday, as December retail sales fell for a third month, according to the Commerce Department, reflecting a continued pullback by consumers on a range of goods, save for groceries, despite the holiday shopping season.
During the first two years of the pandemic, companies like Amazon, Salesforce and Facebook parent Meta hired tens of thousands of workers in an effort to take advantage of surging demand for software and gadgets as people spent more time working, shopping and relaxing at home. But as people have returned to in-person life, that demand has dropped off, and rising interest rates have made it more expensive to borrow money for new investments.
Major tech firms have announced plans for at least 57,000 job cuts in the coming months. (Amazon founder Jeff Bezos owns The Washington Post.)
“Microsoft’s announcement reflects a broad belief among big tech firms that they over-hired over the past three years and that customer demand in 2023 will be uncertain,” said J.P. Gownder, a vice president and principal analyst at research firm Forrester.
The layoffs at Microsoft amount to less than 5 percent of its 221,000-person workforce. Some of the affected workers were notified as soon as Wednesday, the company said.
“These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts,” said Microsoft chief executive Satya Nadella in a note to staff that was published on the company’s blog.
Microsoft, in particular, had been expanding rapidly during the pandemic, adding 77,000 employees from 2019 staffing levels, according to regulatory filings.
“The tech industry in general, and especially those focused highly on software and intellectual property like Microsoft, are facing especially strong macroeconomic pressure from the forecasted economic slowdown and especially the rapid rise in interest rates,” said Josh White, an assistant professor of finance at Vanderbilt University. “A large portion of their value is based on intellectual property rather than physical equipment. All companies will be looking to employ cost-cutting measures over the coming year, but for these companies that rely on IP, cost-cutting unfortunately means layoffs.”
Experts worry that the tech job shedding could represent the bleeding edge of economic woes. Inflation has weighed heavily on Americans’ pocketbooks, shifting spending toward absolute essentials and services and away from goods.
Retailers are already being affected. The Halloween supplier and retailer Party City filed for bankruptcy in federal court on Tuesday, and Bed Bath & Beyond could be next, waylaid by $1.1 billion in losses over its fiscal year, retail experts say.
Even as fears of an impending recession build, so far the labor market has continued to show resilience, with employers continuing to add jobs through December, despite the cool-down throughout the tech sector.
Labor market strength, as well as waning inflation, fueled an optimistic sentiment among the economic elite attending the World Economic Forum this week in Davos, Switzerland. Several conference speakers and goers talked about how a recession, both in the United States and around the world, seems inevitable but probably will be mild.
“If I was to describe the IMF’s outlook for 2023 in one line, it would be that we have a tough year ahead, but there are signs of resilience,” Gita Gopinath, deputy managing director of the International Monetary Fund, said in an address from Davos.
Microsoft’s retrenchment is its largest in several years. The company slashed 25,000 jobs between 2014 and 2015 after shedding the mobile phone operations acquired from Nokia and largely focusing on cloud computing, business software, certain hardware products and gaming.
Nadella told employees Wednesday that Microsoft will “continue to invest in strategic areas for our future … while divesting in other areas.” The company in recent months has poured money into artificial intelligence, including an investment in the maker of the ChatGPT artificial intelligence system. In December, Microsoft announced plans to fight federal regulators to finalize its acquisition of video game company Activision Blizzard, a risky bet that exposes major regulatory liabilities, but with considerable economic upside.
In a regulatory filing, Microsoft said it planned to cut costs through changes in its hardware portfolio — the company makes Surface tablets and other gadgets — and consolidating leased office space. The near-term cost of the moves is expected to be $1.2 billion in its fiscal 2023 second quarter, which ended in December. Microsoft has allowed many of its workers to work from home since the beginning of the pandemic.
Job cuts have been tearing through the tech sphere, with an average of 1,600 workers in the space losing their jobs each day in 2023 so far, according to Layoffs.fyi.
Amazon kicked off a fresh round of cuts on Wednesday as the company looks to trim its head count by more than 18,000, in what is projected to be the biggest round of cuts in the company’s history. Salesforce, one of the most high-profile makers of cloud software for businesses, recently reduced its head count by 10 percent, or nearly 8,000 jobs. Others, like Apple, have held off on layoffs while implementing hiring freezes.
Finance has also been hard-hit, with crypto companies and banking giants like Goldman Sachs slashing thousands of positions and reevaluating expenses, from bonuses to private jets.
In the lead-up to cutbacks, chief executives such as Tesla and Twitter’s Elon Musk, Salesforce’s Marc Benioff and Meta’s Mark Zuckerberg were publicly calling out low performers for waning productivity and asking workers to do more.
Abha Bhattarai, Jaclyn Peiser and Gerrit De Vynck contributed to this report.
Article #3: Vox Media to lay off 7% of workforce
By Oliver Darcy, CNN Business, January 20, 2023
New YorkCNN — Vox Media, the publisher of news websites such as Vox and The Verge, in addition to New York magazine, will lay off 7% of its workforce, chief executive Jim Bankoff said in a Friday morning memo to staff.
Bankoff said the layoffs, which will result in about 130 people losing their roles, impacted multiple teams, including editorial. Those who had their jobs eliminated were notified through email, followed by a later meeting with a human resources officer who would discuss severance packages with them.
Bankoff told staffers the cuts were “due to the challenging economic environment impacting our business and industry.”
“We are experiencing and expect more of the same economic and financial pressures that others in the media and tech industries have encountered,” Bankoff said in his memo.
The union representing Vox Media employees said it was “furious” over the announcement.
“We’re furious at the way the company has approached these layoffs, and are currently discussing how to best serve those who just lost their jobs,” the union said in a tweet.
The media and technology sectors have been battered in recent months as advertisers tighten spending amid broader economic uncertainty. That has led to widespread job cuts.
Google’s parent company Alphabet on Friday joined Big Tech giants Meta, Amazon, and Microsoft in announcing layoffs. Alphabet said it had made the decision to eliminate 6% of its workforce, which translates to approximately 12,000 jobs.
Across the news industry, layoffs have been rampant. CNN, NBC News, MSNBC, Gannett and others have cut their workforces. The Washington Post is also expected to announce a staff reduction soon. And companies that haven’t laid off staffers have taken strong measures to reduce spending.
Entertainment giants, such as Warner Bros. Discovery (CNN’s parent company) and Paramount Global, have also trimmed their workforces.
Bankoff said the tough economy had forced Vox Media to focus on its core business.
“Unfortunately, in this economic climate, we’re not able to sustain projects and areas of the business that have not performed as anticipated, are less core to where we see the biggest opportunities in the coming years, or where we don’t have enough rationale to support ongoing investment in what could be a prolonged downturn,” he wrote to staff.
“In spite of the dedication of the many talented people involved in these initiatives,” Bankoff added, “we need to scale back.”
Sources:
https://edition.cnn.com/2023/01/20/media/vox-media-layoffs
https://twitter.com/business/status/1616380360987746306
https://twitter.com/business/status/1616384669955620865
https://twitter.com/business/status/1616471133225730049
https://www.washingtonpost.com/business/2023/01/06/layoff-numbers/
https://www.washingtonpost.com/technology/2023/01/07/tech-layoffs-job-search-competition/
https://www.washingtonpost.com/technology/2022/11/08/workers-guide-to-layoffs/
https://www.washingtonpost.com/technology/2023/01/18/microsoft-layoffs-tech-industry/
