Dozens of big and small US tech firms are laying off staff just two years after they embarked on a hiring spree. We take a look at where the jobs axe is falling the hardest.
The COVID-19 pandemic and the lockdowns it brought saw a sharp rise in demand for software and tech solutions, as millions switched to working from home or just sat glued to online streaming and gaming services.
The ensuing boom saw firms across the San Francisco bay area's 'Silicon Valley' tech hub hiring on tens of thousands of new staff to cope.
But with the return to more-or-less normal life — barring the economic crisis driven by sanctions on Russia — the market has slumped and many techies are facing redundancy.
The big one is Facebook owner Meta*, where CEO Mark Zuckerberg announced he was shedding 11,000 jobs out of a total 87,000 in November.
A week later Cisco Systems, the firm named after its home city, decided to part ways with 4,100 workers, five per cent of its staff.
Then this January, Business software giant Salesforce said it was cutting its workforce by 10 per cent — around 8,000 redundancies — on top of 1,000 anno8nced in November.
Salesforce to Lay Off 10% of Staff and Cut Office Space
Salesforce, the business software giant, said Wednesday that it planned to lay off 10% of its workforce, or about 8,000 employees, and scale back office space because of concerns about the economy.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Marc Benioff, the company’s co-chief executive, said in a note to employees announcing the cuts.
Salesforce’s revenue, like that of many other technology companies, boomed during the pandemic when more people around the world worked from home and relied more heavily on technology to collaborate with colleagues remotely. In his letter, Benioff suggested that the company had hired too aggressively during that period.
Salesforce employed just under 80,000 people at the end of October, up from about 48,000 three years earlier.
“We hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Benioff said.
A Salesforce spokesperson said the company had no further comment on the cuts.
The layoffs cast the tech industry’s slowdown into even sharper relief. In recent months, tech giants like Amazon have slowed down hiring and cut jobs, while smaller companies like Lyft and Stripe have also announced layoffs. Many of the industry’s largest firms have reported financial results suggesting they were feeling the effects of stubbornly high inflation and rising interest rates.
The company estimated that the changes would cost up to $2.1 billion. Salesforce is offering U.S. employees a minimum of five months of pay, as well as health insurance and career resources, Benioff said. Most of the cuts will be made “over the coming weeks,” he wrote.
A Salesforce spokesperson said the company had no further comment on the cuts.
Salesforce’s sales grew by 14% in its latest quarter, the slowest pace in years; it projected even slower growth in its current quarter. Other tech chiefs, such as Meta’s Mark Zuckerberg, have recently admitted to hiring too many people as they rushed to make cuts. More than 150,000 tech workers were laid off last year, according to Layoffs.fyi, a site that tracks job cuts.
In November, Bret Taylor, Salesforce’s co-chief executive, announced he would resign from his post and leave at the end of this month. In December, Stewart Butterfield, the chief executive of Slack, a workplace communication platform owned by Salesforce, also said he would leave his position by the end of this month. Salesforce bought Slack for $27.7 billion in 2020.
Salesforce is the largest private employer in San Francisco, and its flagship office building is the city’s tallest.
Silicon Valley layoffs go from bad to worse
Shortly before Thanksgiving, Amazon CEO Andy Jassy confirmed rumors that layoffs had begun in multiple departments at the e-commerce giant and said it would review staffing needs into the new year.
On Wednesday, Jassy provided a sobering update on that review: Amazon is cutting more than 18,000 jobs, nearly double the 10,000 that had previously been reported and marking the highest absolute number of layoffs of any tech company in the recent downturn.
Social media companies have struggled with a pullback in digital advertising in particular. Meta, which owns Facebook and Instagram, cut 13% of its employees in November and said its head count would remain “roughly flat” through the end of this year. Snap, Snapchat’s parent company, laid off 20% of its employees in August, blaming challenging macroeconomic conditions. Elon Musk, who purchased Twitter for $44 billion in October, has slashed the company’s workforce by more than half.
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