Throwing Analytical Light on Tech Layoffs
By @Urvashi Arya
Timeline for Tech Layoffs in 2023:
Technology companies have fired more workers in 2023 than in any other month since the pandemic began. Here is a current timeline of the major significant layoffs and the causes of the unrest in Big Tech.
2023 looks similar after a year when technology businesses announced significant layoffs; in fact, the year is off to a worse start than 2022.
The issue: Due to lockdowns during the epidemic that triggered a software buying spree to enable remote work and an increase in e-commerce, big tech businesses like Amazon, Oracle, Microsoft, Salesforce, and Facebook went on a hiring rampage, but now they are seeing revenue decreases.
Not just tech behemoths are making cutbacks. Smaller tech companies are suffering due to the hypergrowth brought on by the epidemic.
According to market research firm Gartner, although corporate software and IT services are predicted to grow the fastest in 2023, overall IT spending is still likely to produce tiny, with data center systems and communications services growing by less than 1%. Meanwhile, a drop in hardware sales is anticipated.
There are growing concerns about a recession due to ongoing supply chain problems, inflation, and the conflict in Ukraine.
According to data compiled by Layoffs, the online tracker monitoring job losses in the IT sector, more staff at tech companies were laid off in January than in any other month since the start of the pandemic. FYI, the online tracker monitoring job losses in the IT sector.
In 2022, IT industry employers jointly eliminated more than 150,000 jobs; in just the first three weeks of 2023, that number increased to more than 30%.
A silver lining for technology professionals is that many layoffs involve non-technical workers, even though prominent businesses like Amazon and Microsoft have already announced sizable employment cuts this year. In truth, corporations have been increasing IT professional compensation due to a dearth of skilled tech talent. According to consultant Janco Associates, raises for IT experts may increase by 8% in 2023.
Look Back at a few layoffs that have already been announced or performed:
Microsoft CEO Satya Nadella announces plans to fire 10,000 employees on January 18, 2023.
Microsoft CEO Satya Nadella said in a blog post on January 18 that the business would be laying off 10,000 workers, or nearly 5% of its workforce.
The CEO attributed the downsizing move to the company's desire to match its cost structure with its revenue structure while investing in areas it anticipates will experience long-term development.
January 16: Google-sponsored 20% of ShareChat employees are let go.:
To prepare for impending economic headwinds, ShareChat, an Indian social media firm sponsored by Google, announced it is letting go of 20% of its workers.
After careful consideration and in light of the emerging market consensus that investor emotions will remain highly cautious throughout this year, a spokeswoman said, "The decision to lower labor costs was decided."
Out of the company's about 2,200 employees, the change is anticipated to affect more than 400. The corporation did not disclose the jobs and the precise number of employees impacted by choice.
The Mountain View, California-based robotics subsidiary Intrinsic AI of Alphabet, the parent company of Google, said on January 13 that it would be making layoffs affecting about 20% of its workforce, or about 40 employees.
Due to changes in priorities and our longer-term strategic orientation, we decided to downsize. It will guarantee Intrinsic can continue to devote resources to our top priorities, including developing our software and AI platform, integrating the recent strategic acquisitions of Vicarious and OSRC (commercial arm Open Robotics), and collaborating with important industry partners, according to a statement from the company.
January 12: 15% of the personnel at Verily, owned by Alphabet
Verily, a San Francisco-based life sciences company owned by Alphabet, is reducing its employees by 15% to streamline its business strategy. The action was taken shortly after the business raised $1 billion.
The downsizing is a part of the business's One Verily effort, which attempts to minimize redundancy and streamline operational areas of the company, according to an email sent by CEO Stephen Gillett to all of its workers.
The corporation said it would consolidate its several business lines into a single, centralized product organization with more interconnected healthcare systems as part of the new One Verily program.
January 11 – Informatica will lay off 7% of its employees to reduce costs.
Enterprise data management business Informatica started with the US Securities and Exchange Commission, which intends to reduce its headcount by 7% through the first quarter of 2023.
According to the corporate filing, the move by Redwood City, California-based Informatica will result in nonrecurring expenses of between $25 million and $35 million in the form of cash outlays for staff transition, notice period, severance payments, and employee benefits.
The business anticipates finishing the layoffs by the first quarter of 2023 but cautioned that there might be a few rare exceptions.
On January 4, Salesforce announced an 10,000 job cutback plan.
San Francisco-based Salesforce said at the beginning of 2023 that as part of a restructuring plan, it would liquidate certain offices and lay off around 10% of its workforce, or about 8,000 workers.
The business said its restructuring plan called for charges between $1.5 billion and $2.5 billion in a filing with the US Securities and Exchange Commission (SEC), with up to $1 billion of those expenses being borne by the company in the fourth quarter of 2023.
In a letter to employees included in the SEC filing, Co-CEO Marc Benioff of Salesforce explained that as the company's income increased owing to the epidemic, it overhired and could no longer support its current employment size due to the continued economic slump. Benioff confessed, "I take responsibility for that.