Tech companies have pressed brakes on hiring as they contend with sluggish consumer spending, higher interest rates and global economic uncertainty. According to Crunchbase News tally, as of late October, more than 45,000 workers in the US tech sector have been laid off in mass job cuts so far in 2022. While some companies have announced job cuts, others have frozen hiring. The names include both big and small tech companies. There are many in the list that saw unprecedented growth during the pandemic due to the boom in online spending. The CEOs of these companies have said that they over-hired. Here are some big technology companies that have cut jobs or announced hiring freeze.
Seagate
Hard drive maker Seagate Technology announced last month that it plans to cut 8% of its global workforce, or about 3,000 employees, citing economic uncertainty and declining demand for its parts. Customers are sitting on a pile of extra inventory, hurting orders and weighing on Seagate’s financial performance, CEO Dave Mosley said. That necessitated cuts. “We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability,” he said.
Intel
Intel Corp is cutting jobs and slowing spending on new plants in an effort to save $3 billion next year, the chipmaker said recently. The reduction in headcount is a response to declining demand for the company’s consumer chips, resulting from a shrinking PC market. This downturn comes even as Intel is set to receive billions in funding from the CHIPS Act; a package of US government aimed to boost domestic chip manufacturing. The layoffs will hit Intel’s sales and marketing teams particularly hard, says Bloomberg, affecting around 20 percent of team members.
Microsoft
Last month, Microsoft spokesperson confirmed that the company let go of additional workers as the software maker’s revenue is expected to slow, thanks to weaker sales of Windows licenses for PCs. “Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly,” a Microsoft spokesperson. “We will continue to invest in our business and hire in key growth areas in the year ahead,” he added. The announcement comes three months after Microsoft said it trimmed less than 1% of employees in July.
Twitter
Twitter has laid off almost half its workforce. The move caps a week of chaos and uncertainty about the company’s future under new owner Elon Musk, the world’s richest person, who tweeted on Friday that the service was experiencing a “massive drop in revenue” from the advertiser retreat. “Unfortunately there is no choice when the company is losing over $4M/day,” Musk tweeted of the layoffs, adding that everyone affected was offered three months of severance pay.
Coinbase
US-based Coinbase laid off 18% of its total staff, around 1,100 workers, citing a looming recession, the crypto winter, and its own overly optimistic growth projections. “Today I shared that I’ve made the difficult decision to reduce the size of our team at Coinbase by about 18%. The broader market downturn means that we need to be more mindful of costs as we head into a potential recession,” said Brian Armstrong, co-founder and CEO at Coinbase.
Netflix
For several years, Netflix, the company that first cracked the television streaming code, was an unstoppable growth machine. However, the year 2022 has been tough for the company. Netflix has seen two rounds of job cuts this year. First in May and second in June. In all, the company has laid off around 500 employees.
Snap
In late August, Snap CEO Evan Spiegel in a memo to employees said that the company would cut its workforce by about 20%, or more than 1,000 workers. Spiegel cited bleak forward-looking revenue projections and said the major restructuring was necessary to “ensure Snap’s long-term success in any environment.” The company had undergone rapid expansion, nearly doubling since March 2020. “We must now face the consequences of our lower revenue growth and adapt to the market environment,” Spiegel said. The writing’s been on the wall for Snap. The company said it would slow hiring after its stock plunged nearly 40% in a single day.
Shopify
In July, Shopify CEO Tobi Lutke announced that the company would lay off 10% of its staff, roughly 1,000 workers. Shopify benefited immensely from ecommerce boom during Covid. Like many companies, Shopify went on a hiring spree. “Ultimately, placing this bet was my call to make and I got this wrong,” Lutke said. “Now, we have to adjust. As a consequence, we have to say goodbye to some of you today and I’m deeply sorry for that.”
Lyft
San Francisco, California-based company Lyft said earlier this month that it would lay off 13% of its workforce, or about 700 employees, in the ride-hailing company’s latest cost-cutting step to cope with a weakening economy. Lyft’s latest move is expected to result in a charge of between $27 million and $32 million in the fourth quarter. It follows 60 job cuts earlier this year and a hiring freeze in September.
Stripe
Stripe has announced that it’s laying off 14% of its workers, impacting around 1,120 of the fintech giant’s 8,000 workforce. In a memo published online, Stripe CEO Patrick Collison said that a major hiring spree due to surge in earnings during pandemic, economic downturn ridden with inflation and other macroeconomic challenges as the reasons. “We overhired for the world we’re in, and it pains us to be unable to deliver the experience that we hoped that those impacted would have at Stripe,” Collison wrote.
Opendoor
The real estate startup Opendoor is letting go of about 550 people, or 18% of the company, across all functions, its co-founder and CEO Eric Wu announced in a blog post earlier this month. “Prior to today, we scaled back our capacity by over 830 positions — primarily by reducing third party resourcing — and we eliminated millions of fixed expenses. We did not make the decision to downsize the team today lightly but did so to ensure we can accomplish our mission for years to come,” he wrote. (Gadgets Now)