More than 30,000 workers have lost their jobs globally in the first week of January,
‘You’re fired or ‘Sorry, we are letting you go’ have become the most dreaded words for workers across the world as company after company is seeing mass layoffs.
On 5 January, Amazon, the e-commerce behemoth, announced that it would be letting go of 18,000 employees — nearly three per cent of their total workforce. On the same day, US business software maker Salesforce said it is laying off about 8,000 employees, or 10 per cent of its workforce. Marc Benioff, the sole chief executive at Salesforce, told employees in a letter that he blamed himself for the layoffs after continuing to hire aggressively into the COVID pandemic, with millions of Americans working from home and demand for the company’s technology surging.
These layoffs are in line with other big companies also announcing cuts in the last months of 2022 and January of this year. After a holiday lull, more layoffs are around the corner, and several companies across the spectrum, led by tech firms, are set to lay off thousands of employees.
Let’s take a look at what the situation is, and how bad it might be in this year.
Who’s been fired?
As mentioned earlier, Amazon and Salesforce already announced massive layoffs for its workforce in the first week of January this year. This is in line with the retrenchment that took place in the tech industry in 2022. Tech titans such as Meta, Twitter, Netflix, Intel, Apple and even Amazon announced layoffs in the past year.
According to website layoffs.fyi, which records job cuts across the industry, 152,000 employees were laid off in 2022 from more than 1,000 companies. Another report, from the firm Challenger, Gray, and Christmas, which has tracked the job market for almost 30 years, said the biggest spike in tech layoffs was in November with almost 53,000 cuts.
Graphic: Pranay Bhardwaj
In addition to Amazon and Salesforce, Adobe has cut down about 100 jobs, concentrated in sales. Chime Financial Inc, which is a digital-banking startup, has also announced a cut of 160 jobs. Video hosting platform Vimeo announced via LinkedIn two days ago that the company would be laying off 11 per cent of its staff amid ‘difficult times’. Leading crypto exchange Huobi is looking to layoff around 20 per cent of its workforce
Twitter, which was taken over by Elon Musk in October 2022, has suffered some of the deepest cuts of its peers right now. The social media platform has eliminated about 3,700 jobs by email. Another social media giant, Meta, also slashed 13 per cent of the company’s workforce, laying off 11,000 people.
Tesla announced that it had axed 200 of its 350 employees working on Autopilot, the seeming crown jewel of Tesla. In June of 2022, Netflix laid off 300 employees after losing subscribers for the first time in more than a decade.
Soundcloud, a music streaming company, also laid off staff, impacting 20 per cent of the company. Major news aggregator Flipboard also let go off 24 workers, or 21 per cent of its staff.
Amazon, the online giant that employs 1.5 million people globally, announced it would be letting go of 18,000 people. This cut is considered to be largest in the company’s history. AFP
A report in Livemint stated that less than a week into 2023, more than 30,000 workers have lost their jobs globally. This is double the number of people who lost their jobs in December 2022. So severe has the retrenchment been that the firings in 2022 surpassed the levels from the Great Recession the world went through 2008-2009 that began with Lehman Brothers collapse.
According to data collated by global outplacement and career transitioning firm global outplacement & career transitioning firm Challenger, Gray & Christmas, 65,000 tech employees lost their jobs in 2008. Cut to 2021, 965 tech companies have laid off more than 150,000 employees in 2022 across the world.
More layoffs coming our way?
And if people thought the worst is over, think again. In this year, there are more layoffs that will take place in the tech world and outside of it.
Cisco Systems has announced that it would begin its restricting plan that will affect about five per cent of employees. HP Inc will cut as many as 6,000 jobs over the next three years, the company said, as profits declined.
Twitter, who already saw mass layoffs in the previous year, will continue the trend. It has been reported that the company laid off dozens of employees in its trust and safety teams across Singapore and Dublin offices in January. The report further added that roles pertaining to policy on misinformation, global appeals and state media were also eliminated in the recent round of firings.
Seagate Technology said that it’s paring about 3,000 jobs. “We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability,” CEO Dave Mosley said.
Goldman Sachs is likely to start cutting thousands of jobs across the firm. The job cuts are expected to be 3,000 in number, but the final number is yet to be determined. AFP
In addition to these, Goldman Sachs is likely to start cutting thousands of jobs across the firm from Wednesday, according to two people in the know. A source speaking to news agency Reuters said that the job cuts are expected to be 3,000 in number, but the final number is yet to be determined. The Goldman Sachs layoffs are likely to centre around its investment banking division but will also affect most of the major divisions. Its loss-making consumer business is also likely to see hundreds of jobs cut.
Fast-food giant McDonald’s is also planning to cut jobs as part of a major reorganisation. The layoffs are expected in April. McDonald’s CEO Chris Kempczinski, according to a CNN report, Kempczinski wrote an internal memo informing the staff of the impending layoffs.
Stitch Fix, a San Francisco-based online apparel service, will also see layoffs — almost one fifth of its salaried employees will be let go, interim CEO Katrina Lake said in a memo to staff. Crypto lender Genesis will also see cuts — reportedly affecting 30 per cent of its staff, reducing the struggling lender’s headcount to 145.
Fast-food giant McDonald’s is also planning to cut jobs as part of a major reorganisation. AFP
Why the cuts though?
But while all these companies lay off people, the question still being asked is why so many layoffs. Experts state that the major reason for this is the COVID-19 pandemic. They explain that as people went into quarantine in 2020 and life moved online, companies hired in droves. However, as normalcy resumes across the world, these companies have to correct their numbers and staffing.
There are other pandemic-related reasons at play too. Daniel Keum, an assistant professor of management at the Columbia Business School, told Forbes that in the past few years companies may have resisted laying people off because of the negative attention or cruelness of doing so in the depths of a pandemic. Moreover, firms found it difficult to judge worker performance and hence, may have held off on reducing headcount. Now, as more companies head back to the office, at least on a part-time basis, leadership is considering the cuts it might previously have resisted.
Besides the COVID-19 pandemic, the Russia-Ukraine war is another reason at play for the mass layoffs. The war, now in Day 320, has brought major economic decline globally. Supply chains were disrupted, interest rates and fuel costs rose, headwinds of inflation had picked up, and the world was staring at a recession.
Companies realised that the newly-hired employees were turning out to be expensive. The fear of recession and slow growth is also forcing companies to restructure and cut costs.
Ketan Godkhindi, Chief Strategy Officer at Witzeal Technologies, a Gurugram-based gaming technology company, was quoted as telling The Quint, “The year 2023 will be a year of sustenance as companies that are in a considerably bad patch will look to cut bench strength. Economists are of the opinion that the coming year will be defined by a mild recession and decelerating growth. This might result in companies slowing down headcount addition.”
So, if 2022 was bad, 2023 doesn’t look better. Here’s hoping that the dreaded pink slip isn’t in our future.
With inputs from agencies
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Updated Date: January 09, 2023 16:19:10 IST
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