All of the tech layoffs announced in 2023
The tech industry has taken a beating since the end of the pandemic. From a lingering global supply chain crisis to rising inflation and a seemingly insurmountable IT skills crisis, major technology companies are faced with unprecedented uncertainty about their futures in the short to medium term. For many boardrooms, that malady has had only one cure: layoffs.
According to layoffs.fyi, 150,000 tech workers around the world were made redundant throughout last year. With macroeconomic headwinds showing no signs of dying down, it looks like 2023 is shaping up to be as bad a year for job security in the tech sector.
In February, the CEO cut an additional 200 people from the firm’s remaining 2,000 employees. Critics have argued that the job cuts have compromised Twitter’s functionality and inadvertently led to a rise in hate speech on the platform. However, Musk has made it clear that he is actively recruiting for at least one role at the company – that of his replacement. Seemingly tired of running the troubled social media platform, the multi-billionaire said that he was happy to vacate the role of chief executive once he found someone “foolish enough to take the job”.
Salesforce
Salesforce had a good pandemic. Up to three million transactions were processed on the firm’s Commerce Cloud platform in 2020, more than double the previous year’s rate. Salesforce’s launch of Work.com, an advice and product service for businesses and educational establishments, and Vaccine Cloud, which helped public authorities and healthcare providers to speed up the inoculations operation, were also surprise hits.
Since then, challenges have mounted for Salesforce, with the company being forced to restructure its finances late last year. In January 2023, the company announced that almost 7,000 employees – almost 10% of its total workforce – would eventually be made redundant, alongside a concomitant reduction in office space. So far, 800 of that number have lost their jobs. It is believed that the redundancies, expected to continue up until 2024, will eventually cost the business around $2bn in severance pay, and $450-$650m in office space exit fees.
“I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investment in AI,” announced Google’s chief executive Sundar Pichai in January, before sacking 6% of the workforce manning Alphabet, the search engine’s parent company.
Equating to almost 12,000 people, the layoffs were attributed to lower-than-expected advertising revenues in the third quarter of 2022. ‘Once again, YouTube growth slowed to a crawl amid tough competition from TikTok and other players in the video-streaming space,’ wrote Jesse Cohen, a senior analyst at Investing.com. “Alphabet is being negatively impacted Dell’s revenue beat all expectations in the annual report of October 2022, with a 14% growth in revenue year-on-year. However, the last quarter of 2022 signalled a 37% drop in shipments, making Dell the most prominent victim of a worldwide dip in computer sales.
According to Dell’s chief operating officer, Jeff Clarke, cost-cutting alone would not balance the firm’s books. The company’s prospects were further diminished Despite its dominant position in the retail market, Amazon has not proven immune to layoff fever. Up to 18,000 jobs are expected to be eliminated at the firm, chief executive explained in January, with most of the cuts falling on its e-commerce and human resources departments. An additional 9,000 redundancies were announced in March, mostly impacting the gaming and advertising departments of its public cloud division, AWS.
“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” said Jassy, in a statement. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”
Jassy portrayed the cuts as almost a return to normalcy for Amazon, in that the total number of staff made redundant was roughly equivalent to the additional workforce it hired during the pandemic to cope with increased demands for its products and services. Now, however, “given the uncertain economy in which we reside and the uncertainty that exists in the near future,” he said, “we have chosen to be more streamlined in our costs and headcount.”
Microsoft
Microsoft seemed to have made a canny bet on OpenAI after the latter’s generative AI service, ChatGPT, astonished the world. Yet, the Washington-based software giant has decided to cut thousands of staff this year, too. “We are making changes that will result in the reduction of our overall workforce The need to cut so many staff has been variously attributed to over-hiring during the pandemic, a dip in demand thanks to a global economic slowdown, and the impact of rising inflation on the company’s supply chains. It is anticipated that Microsoft will have to pay out around $1.2bn in redundancy payments, as well as for internal changes to the hardware portfolio and lease consolidations.
SAP and IBM
January also saw IBM announce plans to make 3,900 of its employees redundant. These cuts, analysts observed, were related to the sale of its subsidiary Kyndryl and missing certain financial targets over the previous year. IBM shares dropped A few hours after IBM’s announcement, its partner and joint stakeholder SAP shared its plan to sack 3,000 of its staff. In addition, the German software provider will likely sell its stake in experience management platform Qualtrics thanks, in part, to cost considerations arising from high inflation. More than 120,000 people work at SAP, meaning that the expected job cuts will see a drop of about 2.5% of its staff. However, the overall workforce is still bigger than it was during the pandemic, meaning that the company can save up to €350m per year starting in 2024 compared to 2020.
Atlassian
Software developer Atlassian chose to cull 500 people from its workforce at the beginning of March 2023. All the staff that were made redundant left the company with 15 weeks’ pay alongside one extra week for every year they worked at the company.
‘A month back we reorganised our company to better reflect operating in a changing and difficult macroeconomic environment,’ wrote company co-founders Mike Cannon-Brookes and Scott Farquhar in a ccommiserative statement. ‘We made tough calls to prioritise the most critical work for our current and future customers. While it helped us streamline work, we need to go further in rebalancing the skills we require to run faster at our company priorities.’