The first two weeks of 2023 have been dominated by headlines about layoffs across a number of high-profile tech companies. According to aggregator Layoffs.fyi, over 55,900 employees have lost their positions at over 170 tech companies so far this year.
While companies have cited the uncertain economic climate as a large factor in their decision, it’s currently unclear if the US will actually enter a recession. It’s true that many companies over-hired during the pandemic—but the slowed period of growth they’ve entered now is still a period of growth, not decline. Most of the companies involved are still making a profit.
It’s also unclear how much money companies actually save in the short term by laying off workers. Severance packages and support cost money, and remaining workers often suffer a decrease in productivity.
However, it does seem clear that the stock market is rewarding layoffs, as many of the companies involved saw a rise in share prices directly after announcing layoffs. Stanford professor Jeffrey Pfeffer believes the string of layoffs is simply due to tech firms copying each other.
There are many long-term and large-scale ways an organization can benefit from layoffs, but restructures that involve a significant reduction in headcount usually come with risk. With so many unknowns, it’s hard to say how these layoffs will impact the overall health of the tech industry. Once economic worries begin to clear, the industry should be in a better position to hire again.
Below, we’ve compiled a list of all high-profile companies that have been impacted by layoffs.
Google: 12,000 Employees
CEO Sundar Pichai announced on January 20 that Google would lay off 12,000 employees, totaling 6% of its workforce. Affected employees will receive 16 weeks of severance pay plus two weeks for each additional year they’ve been at the company. Google also plans to provide six months of healthcare, job placement services, and immigration support.
Like many companies announcing workforce reductions, Pichai believes that Google’s dramatic growth and hiring over the past two years are no longer fitting with the economic situation. Eliminated roles span across various product areas and levels, with smaller side projects being discontinued in order to redirect funds to core areas.
Microsoft: 10,000 Employees
In order to prepare for an expected lull in revenue growth, Microsoft said on January 18 that it would lay off 10,000 workers between now and March 31. The COVID-19 pandemic was a busy time for the company as everyone from schools to big enterprises rushed to transition to cloud computing to support remote work.
Now that the boom has ended, the company says it needs to strengthen its standing and prepare for a period of low spending. The cut will affect multiple teams in offices across the world, with a focus on tech sales and marketing departments.
Meta: 11,000 Employees
The current onslaught of layoffs is thought by some to have been sparked by Meta back in November. It announced the redundancy of 13% of its staff, totaling over 11,000 employees, as part of a set of changes aiming to make the company leaner and more efficient.
The company also implemented a hiring freeze and plans to hire fewer people in 2023, leading to a higher number of redundancies in the recruitment department compared to other areas. The decision was likely influenced by investors who were concerned by the 19% increase in Meta’s costs and expenses.
Amazon: 18,000 Employees
After hiring over 700,000 employees during 2020 and 2021, Amazon has now implemented a hiring freeze across the company and plans to cut 18,000 jobs over the next few months. Although it’s letting go of more people than most, the number totals just 1.2% of Amazon’s overall workforce.
The company attributes the cuts to slowing sales growth, rising expenses, and an unstable economic situation. The most heavily affected areas will be the human resources and store divisions.
Coinbase: 950 Employees
Cryptocurrency company Coinbase published an email from the CEO on January 10th detailing the decision to reduce operating expenses by 25%. This included letting go of around 950 people, whose system access was removed before they even received notification of their redundancy.
The company alluded to both downturns in the crypto market and the general economy as reasons for the cut. The CEO also emphasized that the layoffs were not a reflection of work quality or contributions made to Coinbase.
Twitter: 40 Employees
Twitter announced yet more layoffs on January 5, after already halving its workforce during the latter months of 2022. The social media platform let go of 40 data scientists and engineers in the advertising departments. According to some reports, Twitter’s ad revenue has plummeted in recent months, and the eliminated roles were considered to be unimportant or failing.
Twitter’s reduction in workforce is possibly less due to wider economic influences and more due to its recent change in ownership. Elon Musk’s decisions after buying the company have been a talking topic for the past four months, but his motivations remain unclear.
Spotify: 600 employees
On January 23, Spotify added itself to the growing list of tech company layoffs by announcing its plans to let go of approximately 600 employees. CEO Daniel Ek cited the need for greater efficiency in a challenging economic environment as the driving force behind the decision.
By reducing its workforce by 6%, the company believes it will be able to cut costs and meet the efficiency goals it needs to continue thriving in the current climate. All impacted employees will have at least five months of severance pay, healthcare, immigration support, and career support.
Salesforce: 8,000 Employees
Cloud-based software company Salesforce announced plans to lay off 10% of its employees on January 4—a total of 8,000 people. In keeping with the general trend, the company says it hired too many people during the pandemic boom and is now forced to readjust to the changing economic climate.
Vox Media: 130 Employees
Digital media firm and publisher Vox Media informed employees of a 7% workforce reduction on January 20, citing a challenging economic environment. The 130 roles affected will span across revenue, editorial, operations, and core services. Like many tech companies, the media giant is cutting back on areas that are unrelated to its core services.
Wayfair: 1,750 Employees
January 20 also saw an announcement from furniture retailer Wayfair. After sales rose during the pandemic, Wayfair hired more people to try to drive numbers even higher. However, like so many tech companies, it now feels the current economic climate won’t allow further growth.
The co-founder and CEO, Niraj Shah, sent an email out to staff announcing a round of layoffs totaling 1,750 workers (10% of the company).
Capital One: 1,100 Employees
Capital One Financial Corp announced cuts to their technology sector on January 19th. Over 1,100 employees are thought to be affected and have been invited to apply for other roles within the company. They plan to integrate the eliminated roles into existing engineering and product manager positions.
Since you’re here…
Were you one of the tens of thousands of workers impacted by this year’s tech layoffs? Springboard wants to help. Our new Career Reboot Scholarship is intended to assist job seekers from tech looking to upskill, reskill and stand out in a competitive hiring environment. Get $1,000 off any Springboard bootcamp in software engineering, data analytics, UX design, cybersecurity, tech sales, and more. Visit this page for eligibility requirements and to apply.
