Uh oh. It’s still happening. Large-scale tech company layoffs continue in 2023. The end of 2022 saw mass layoffs from giants like Twitter and Meta, and in 2023, more are following suit.
In many countries like the US, unemployment remains the lowest it has been in the past 50 years. Despite this, we’re seeing huge cutbacks that are affecting hundreds and thousands of individuals across the globe. So why is this happening right now? What does this mean for tech as an industry? Will it get better? We’ll answer all of these questions and more, including:
- What is a Mass Company Layoff?
- Major Tech Companies Laying Off People in 2023
- Are More Layoffs Coming in 2023?
What is a Mass Company Layoff?
A mass layoff is when a company reduces a large number of its workforce size in a single site of employment during a 30-day period, without closing down the company itself. According to Bloomberg Law, in order for it to be considered a mass layoff, it must fulfill one of the following conditions:
- At least 50 employees are laid off, leading to a reduction of 33% (or one-third) of the workforce size
- 500 or more employees are laid off, regardless of the company size
Major Tech Companies Laying Off People in 2023
Businesses across the globe in all industries are struggling to adapt to the changing economic times. Inflation remains high, and many fear the inevitable oncoming of another recession. Here are the top 8 biggest company layoffs we consider to have occurred in just the first few weeks of 2023.
Becoming the biggest layoff announcement of 2023 so far, Amazon is set to cut 18,000 jobs. This came as a huge shock as they had previously announced a cut of 10,000 jobs in November. This comes shortly after more than doubling its number of employees over the pandemic – around 1.6 million at the end of 2021. The slashes have impacted around 3% of Amazon’s corporate body and 1% of its global workforce.
Amazon is also reportedly applying a hiring freeze across corporate, reduced its efforts in warehouse expansion, and has indefinitely paused its new experimental projects.
Alphabet, the parent company of Google, announced a major cut of 12,000 people from its workforce in January via an email sent to all employees from CEO Sundar Pichai. This was after multiple periods of dramatic growth when they were facing “a different economic reality than the one we face today”. These cuts are reportedly occurring immediately in the US, and cuts happening in other countries will follow soon. This will be around 6% of Google’s total workforce.
On January 18, 2023, Microsoft CEO Satya Nadella announced to Microsoft employees that 10,000 jobs would be cut through to Q3, in order to “align our cost structure with our revenue and where we see customer demand.” This layoff represents just under 5% of Microsoft’s total workforce. Satya also reassured that they will continue to hire and invest in key strategic areas, with the hopes of emerging stronger than ever.
Cloud computing giant Salesforce will lay off more than 10% of its workforce from January – around 8,000 workers. Since then, it has been reported that a whole month later, employees are now being notified that they are part of the cut. According to Yahoo Finance, CEO Marc Benioff revealed in a now-leaked meeting that the new, young employees working remotely would take the biggest hit, asserting that they are less productive. Ouch.
Dell recently announced a mass layoff of 6,650 workers earlier this month, 5% of its total workforce. The announcement comes after a 6% decrease in sales in last year’s last quarter and as conditions “continue to erode with an uncertain future”, according to a memo from COO Jeff Clarke. These mass layoffs are part of Dell’s more general cost-cutting strategy, which includes a hiring freeze across all departments and reductions on travel.
Paypal is laying off 2,000 employees at the beginning of this year, reducing its total number of staff by 7%. The President and CEO, Dan Schulman, shared a short message to the PayPal workforce about the layoff, stating, “This will be a challenging period for our community, but I am confident we will come through it together with compassion for each other, our values at the fore, and a shared commitment to the future of PayPal.”
Zoom is also experiencing a high percentage of layoffs. In early February, Zoom announced that 1,300 workers would be let go in the upcoming months, around 15% of their total workforce. Zoom experienced exponential growth over the pandemic and became a vital source of communication for many across the globe. In a memo to his employees, Eric Yuan, CEO of Zoom, said that he would be reducing his salary by 98% in the fiscal year and forgo his bonus. Furthermore, executive members will reduce their salaries by 20% and also reject their 2023 bonus.
Although not the largest number of employees laid off, Coinbase has announced the largest percentage layoff at 20% – around 950 roles. This comes after a mass layoff in June of 1,100 workers, just 7 months prior, which CEO and Co-Founder Brian Armstrong acknowledged in his most recent announcement was too little – “in hindsight, we could have cut further at that time”. Like many others, Coinbase will be scrapping several projects to further reduce operating costs.
Are More Company Layoffs Coming in 2023?
To put it bluntly, yes. But as many of the CEOs above have assured, it’s a necessary thing to ensure more stability for longevity. After all, tech is the 6th biggest industry in the world, valued at an eye-watering $5.2 trillion, and it’s only going to get bigger. You can stay up to date with the latest tech layoffs with this handy company layoff tracker.
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