Though technology companies announced massive layoffs last year, 2023 is looking much worse, as tech giants including Amazon, Microsoft, Google, IBM, SAP, Salesforce, and Facebook parent company Alphabet announce sweeping jobs cuts.
The problem: Big Tech went on a hiring binge during the pandemic when lockdowns sparked a tech buying spree to support remote work and an uptick in e-commerce, and now they face revenue declines.
It’s not only tech giants who are conducting layoffs. Smaller tech firms were also caught up in pandemic-generated hypergrowth and are now suffering the consequences.
Although global IT spending is forecast to rise in 2023, with enterprise software and IT services experiencing the greatest growth, the overall increase is expected to be modest, with data center systems and communications services growing by less than 1%, according to market research firm Gartner. Meanwhile hardware sales are forecast to decline.
Continuing supply chain issues, inflation, and the war in Ukraine are also having an impact on both business and consumer spending, leading to fears of recession.
According to data compiled by Layoffs.fyi, the online tracker keeping tabs on job losses in the technology sector, tech compaies have laid off 101,657 workers in the first six weeks of the — equivalent to 64% of total tech company layoffs for all of 2022.
While high-profile tech companies such as Amazon and Microsoft have already announced significant job cuts this year, the silver lining for technology pros is that many of the layoffs involve non-technical staff. In fact, a lack of experienced tech talent means companies have been raising salaries for IT professionals, with consultancy Janco Associates predicting that raises for IT pros could jump 8% in 2023.
Here is a list — to be updated regularly — of some of the most prominent technology layoffs the industry has experienced recently.
Microsoft confirmed that it is cutting employees working on its HoloLens, Surface laptop and Xbox products, as reports surfaced that the tech giant will be laying off 100 employees working for its industrial metaverse team and closing that unit. The move to cut staff working on HoloLens and in its industrial metaverse team came as a surprise since the the company had made recent moves to expand efforts to move its augmented reality, virtual reality and metaverse initiatves from the consumer to the enterprise side. In a statement, though, Microsoft said it was committed to the industrial metaverse. The company did not specify how many jobs it would cut in those areas, though a Worker Adjustment and Retraining Notification (WARN) from Washington state Friday noted that Microsoft had reported that 617 employees would be laid off in Redmond, Bellevue and Issaquah.
Yahoo said it will lay off about 20% of its staff, or apporximately 1,600 workers, by the end of year, according to media reports confirmed by the company. The move is aimed at restructuring the company’s advertising technology business unit and reallocating its finances more efficiently. The layoffs mark the end of Yahoo’s attempts to be a direct competitor to Google and Meta in the digital advertising market.
Microsoft-owned software development and version control service provider GitHubowned by Microsoft said it would be cutting 10% of its workforce, or about 300 employees, and moving the remaining staff to remote work in order to safeguard the company’s immediate financial stability.
The layoffs came about a month after the company enacted a hiring freeze.
Cloud-based videoconferencing service provider Zoom said that it was laying off 15% of its workforce, fearing uncertain macroeconomic conditions. The move came after the company went on a hiring spree during the pandemic.
In addition, Zoom said it is also making changes in team structure and several members of its leadership team will take pay cuts.
Due to declining PC sales and infrastructure requirements, Dell Technologies said it would lay off 6,650 workers, or about 5% of its total workforce. In addition to the downsizing, Co-Chief Operating Officer Jeff Clarke said the company would introduce changes that include changing the structure of its sales team and integrating the services division of its consumer and infrastructure businesses.
In a company filing with the US Securities and Exchange Commission (SEC), Splunk said it would be laying off 4% of its workforce as part of broader measures to optimize costs and processes ahead of uncertain macroeconomic conditions. The decision to downsize will affect 325 employees at the company, mostly in the North America region.
In a message shared with PayPal employees and posted on the company’s online newsroom, PayPal President and CEO Dan Schulman said the company was set to cut 2,000 jobs, about 7% of its workforce.
Although the company beat analyst expectations in November when it reported its third quarter financial results, PayPal downgraded its forecast for the fourth quarter, citing a challenging macro environment and slowing e-commerce trends.
Despite revenue rising 11% in 2022, during an announcement about its fourth quarter financial results, SAP said that due to net income dropping by 68%, the company would be undertaking some restructuring, resulting in layoffs.
Whereas companies such as Google or Salesforce announced across-the-board layoffs based on performance review criteria to reverse over-hiring during the pandemic period, CEO Christian Klein said that the job cuts are part of “a targeted restructuring” and not performance-based.
“We definitely didn’t over-hire,” Klein said, noting that revenue grew faster than SAP employee growth in 2022.
After spinning off most of its infrastructure management division as a new business, Kyndryl, in November 2021, and selling some assets of its Watson Health business in January 2022, on the same day as IBM’s Q4 2022 results were announced, the company said it was eliminating 3,900 job roles, or 1.5% of its global workforce.
On a conference call with analysts to discuss the results, CFO Jim Kavanaugh didn’t directly mention the job cuts, instead alluding vaguely to the situation by acknowledging the business would have some “stranded costs” to address in early 2023, resulting in a “modest” charge of about $300 million
Later that day, in an interview with Bloomberg, Kavanaugh explained that those stranded costs related to staff left with nothing to do following the asset disposals and as a result, they would be laid off from the company.
In a statement, a spokesperson for IBM said it was important to note the charge is entirely related to the Kyndryl spinoff and healthcare divestiture.
Google’s parent company Alphabet announced it was cutting 12,000 jobs, around 6% of its global workforce. An internal memo from Sundar Pichai said that he takes “full responsibility for the decisions that led us here.”
The company will be paying affected employees at least 16 weeks of severance and six months of health benefits in the US, with other regions receiving packages based on local laws and practices.
The news comes four months after Alphabet posted lower-than-expected numbers for its third financial quarter, where it fell behind both revenue and profit expectations. However, while overall revenue growth slowed to 6% in the quarter for Alphabet, Google Cloud grew 38% year-on-year to $6.9 billion.
On Jan. 18, Microsoft CEO Satya Nadella confirmed in a blog post that the company would be cutting almost 5% of its workforce, impacting 10,000 employees.
The chief executive chalked up the downsizing maneuver to aligning its cost structure with its revenue structure while investing in areas that the company predicts will show long-term growth.
The Seattle-based tech giant reported its slowest growth in five years for the first quarter of its fiscal 2023, due largely to a strong US dollar and an ongoing decline in personal computer sales, causing net income to fall by 14% to $17.56 billion from this time last year. Rising cloud revenue helped to soften Microsoft’s growth slowdown.
Google-backed, India-based social media startup ShareChat said it is laying off 20% of its workforce to prepare for oncoming economic headwinds.
“The decision to reduce employee costs was taken after much deliberation and in light of the growing market consensus that investment sentiments will remain very cautious throughout this year,” a spokesperson said.
The move is expected to impact over 400 employees out of the company’s approximately 2,200 staffers. The company did not disclose the roles and the exact number of workers affected by the decision.
Alphabet, Google’s corporate parent, also announced there would be layoffs at its Mountain View, California-based robotics subsidiary Intrinsic AI, eliminating around 20% of its workforce or roughly 40 employees.
“This (downsizing) decision was made in light of shifts in prioritization and our longer-term strategic direction. It will ensure Intrinsic can continue to allocate resources to our highest priority initiatives, such as building our software and AI platform, integrating the recent strategic acquisitions of Vicarious and OSRC (commercial arm Open Robotics), and working with key industry partners,” according to a company statement.
Verily — a life sciences firm also owned by Alphabet and headquartered in San Francisco — is downsizing its workforce by 15% to simplify its operating model. The move comes just months after the company raised $1 billion.
According to an email sent by CEO Stephen Gillett to all its employees, the downsizing is part of the company’s One Verily program, which aims to reduce redundancy and simplify operational aspects within the company.
As part of the new One Verily program, the company said it will move from multiple lines of business to one centralized product organization with increasingly connected healthcare systems.
Enterprise data management firm Informatica announced plans to lay off 7% of its total workforce through the first quarter of 2023, the company said in a filing with the US Securities and Exchange Commission.
The move by Informatica, headquartered in Redwood City, California, will incur nonrecurring charges of approximately $25 million to $35 million in the form of cash expenditures for employee transition, notice period, severance payments and employee benefits, the company filing showed.
The company said it expects the layoffs to be completed by the first quarter of 2023 but added that there might be limited exceptions.
At the beginning of 2023, San-Francisco based Salesforce announced it will lay off about 10% of its workforce, roughly 8,000 employees, and close some offices as part of a restructuring plan.
In a filing with the US Securities and Exchange Commission (SEC), the company disclosed that its restructuring plan calls for charges between $1.4 billion and $2.1 billion, with up to $1 billion of those costs being shouldered by the company in the fourth quarter of 2023.
In a letter sent by Salesforce’s co-CEO Marc Benioff and attached to the SEC filing, he told employees that as Salesforce’s revenue accelerated through the pandemic, the company over-hired and can no longer sustain its current workforce size due to the ongoing economic downturn. “I take responsibility for that,” Benioff said.
Seattle-based tech behemoth Amazon said it would be laying off more than 18,000 staff, with the bulk of job cuts coming later this month. The news confirmed a December Computerworld article reporting that Amazon layoffs were expected to mount to about 20,000 people at all levels While several teams are impacted, the majority of the job cuts will be in the Amazon Stores and People, Experience, and Technology (PXT) organizations.
According to a note from CEO Andy Jassy, the layoffs are a result of “the uncertain economy.” He also said that Amazon had “hired rapidly over the last several years,” but added that the layoffs will help the company pursue more long-term opportunities with a stronger cost structure.
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