Tech layoffs are set to be in full force in the year 2023. It has been estimated that over ten million people will lose their jobs. Many of these will be at the hands of a few of the world’s biggest tech companies. For example, Hewlett-Packard has predicted a total of 400,000 layoffs. Some estimates also predict that Amazon, Disney, and Lyft will suffer significant losses.
Amazon
Amazon is one of the largest technology companies in the world. It employs about 1.54 million people worldwide. This makes it the second largest private employer in the United States, after Walmart.
In November, Amazon announced plans to trim its workforce by about 10%. The company also halted new incremental hiring and consolidated its teams.
A corresponding memo from CEO Andy Jassy explained the significance of these changes. He noted that it was the first time Amazon had laid off workers in this manner. While not an entirely rosy scenario, the cuts were designed to help reduce expenses in a world of uncertain macroeconomic conditions.
Amazon’s layoffs are primarily targeted at its human resources department and its brick-and-mortar retail operations. The company also offers severance packages to affected employees. However, it’s not clear how many layoffs have been approved.
While Amazon may not be the first tech company to go through the wringer, its tech layoffs will surely impact a significant number of tech workers. As the recession hits, it will be forced to trim its workforce.
The company’s stock has lost over 50 percent of its value in the past year. After being bought for $44 billion by Elon Musk, the tech giant has announced widespread job cuts.
Lyft
Lyft has been laying off staff to trim costs and boost profitability. Its latest cost cutting measures are in addition to a hiring freeze it implemented in September. But the company hasn’t made any significant changes to its guidance for the fourth quarter.
In a memo to employees, Lyft’s CEO Logan Green and CFO John Zimmer wrote that the company should take proactive steps to get ahead of the economic curve. They pointed to the “oms” of the name-brand tech industry as well as the broader macroeconomic challenges facing the U.S.
The company also says that it has a plan to sell its first-party vehicle service business. This will help it to achieve a key financial goal: $700 million in free cash flow in 2024.
Lyft will also incur severance charges in the form of a $27-$32 million charge for terminating 683 employees. Its executives say that this will allow the firm to refocus its resources on the most valuable opportunities.
However, a better explanation would be that the company is planning to shed a whopping 13% of its workforce. That’s one of the most sweeping cuts in the tech world, with more than four hundred roles impacted.
Peloton Interactive
Peloton is in the midst of cutting almost 3,000 jobs. It’s the fourth round of layoffs this year. This would represent 12% of its global workforce.
The exercise equipment maker, which launched nationwide during the pandemic, has struggled to turn its business around. It’s lost $2.8 billion in its fiscal year. Earlier this year, it announced deals with Amazon and Dick’s Sporting Goods.
Peloton has made several rejigs this year, including shifting its delivery work to third-party providers. As part of the rejig, the company plans to reduce its owned and operated warehousing.
The company also announced that it will stop manufacturing Peloton bikes in-house. Instead, it will begin selling the bike through retailers.
Peloton has been working on a restructuring plan for the past few months. The company’s chief commercial officer and head of marketing recently left the company.
After a long succession process, Peloton’s new CEO, Barry McCarthy, is set to take the helm. He told the Wall Street Journal that the marketing department will be the hardest hit.
Peloton is likely subject to the WARN Act, which requires employers to give employees 60 days’ notice before cutting or firing them. Some of the Peloton workers affected by the layoffs may be able to recover up to 60 days’ worth of back pay.
Disney
Disney is considering layoffs in 2023. This is part of its overall cost cutting plans. The company is also launching Disney+, a subscription streaming service that is popular for original series, like “Hawkeye”. However, the service has already lost over $1 billion in quarterly losses, which is a major concern.
Disney executives are confident that Disney+ will meet or exceed its subscriber targets. But the streaming service has alienated some Hollywood power players, who have been critical of the reorganization.
Bob Iger, who was previously CEO of Disney, is still on the job. However, he will face some economic headwinds in the coming years. He also has deep ties to the creative side of the business.
It’s no surprise that Iger would be concerned about the recent decline in revenues and the increasing costs of content distribution. Disney’s studio peers have been cutting their costs aggressively. They’re now looking to reduce their headcounts by 15% to 25%.
Disney will still be hiring for some roles, but those positions will be limited. This will include a small subset of business-driving roles, including Product Development, Experiences, and Products.
As for Disney’s Media division, it is losing money. In the fourth quarter, the company saw a loss of $1.5 billion for its streaming service. That’s a dramatic increase from its previous operating loss of $0.8 billion.
Hewlett-Packard
HP, one of the leading manufacturers of computer printers and personal computers, announced plans to lay off 7,000 to 9,000 workers. The move comes as PC sales continue to slide. In fact, HP expects a 10-percent decline in the market for personal computers over the next several months.
HP’s restructuring plan is designed to drive structural cost savings, according to the company’s impact report. While the company does not reveal the size of the cuts, it expects to incur $1 billion in restructuring charges during the fiscal year 2023.
In addition to cutting jobs, HP will also reduce its real estate footprint. A total of 300 contractors are expected to be affected.
While the layoffs come during a time when demand for hardware is sagging, HP is focusing on subscription services and new ventures. Its PC business had net revenue of $10.3 billion in the fourth quarter. However, commercial and consumer net revenue declined by 6% and 25 per cent, respectively.
The layoffs are part of HP’s “Future Ready Transformation plan,” which aims to cut costs by restructuring its business. The company expects to save $1.4 billion in annualized spending by 2025.
HP’s CEO, Enrique Lores, cited poor performance as a result of the macroeconomic conditions. He said that recent challenges would persist into the future.
Salesforce
It’s not uncommon for companies to cut back on employee headcount when the economy is slow. In fact, some of the largest tech companies in the world, including Amazon and Google, have reduced their workforces to prepare for the inevitable downturn.
Salesforce is one of the largest private employers in San Francisco. The company had nearly 80,000 employees at the end of the third quarter. At that time, the company’s valuation was at a record high of $300 billion.
However, the company has been hit by significant layoffs in recent months. These include cuts in its real estate holdings and office space reductions. As a result, the company plans to lay off ten percent of its workforce.
According to Salesforce, the company will incur costs of $1.4 billion to $2.1 billion due to this restructuring effort. This figure includes the cost of severance payments, stock-based compensation, and employee transition costs.
Salesforce’s chief executive, Marc Benioff, wrote a letter to employees warning them that the company will be laying off 10% of its staff in coming weeks. Affected workers will receive health insurance, five months of pay, and career resources.
Salesforce will also be closing some offices. The company expects to sell a small portion of its office space in select markets.
TikTok
The video app TikTok has laid off hundreds of its employees over the past few years. It is now trying to restructure its operations, primarily in the U.S. This comes as the firm’s parent company, ByteDance, faces increasing scrutiny by the U.S. government.
In July, the company cut about 100 workers, according to a former employee. However, the company’s CEO, Shou Zi Chew, has not confirmed the cut. Reuters has reached out to ByteDance for comment.
Several other tech companies, including Twitter and Snap, are laying off thousands of employees. Other tech firms, including Amazon, are also planning layoffs. Many of these layoffs are in corporate positions.
According to Wired, one TikTok employee said that the restructuring is related to the general economic downturn. During the last year, the company was looking into expanding its e-commerce business and creating a logistics network in the U.S. These opportunities could allow TikTok to gain a foothold in new product categories, the former employee said.
As of August, the company had listed more than 4,000 jobs worldwide on its career portal website, but it had not been updated recently. This could be a sign of continued recruitment, but it’s not clear if the company plans to expand into more categories.
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