Tech companies are dealing with the aftermath of the pandemic and marking the end of a decades-long industry-wide boom. “For the last 20 years, Silicon Valley has had the wind at its back thanks to rapid adoption of new technologies like the internet and smartphones,” Timothy B. Lee explains for Slate. But now “the internet is maturing, and as a result, big tech companies don’t have the same growth potential today that they did in 2012 or 2002. Investors, recognizing that, are increasingly demanding that tech companies focus on profits rather than growth.”
As a result, many major tech companies have announced layoffs and hiring freezes in recent weeks. Here are the biggest layoffs this season:
Amazon is expected to lay off 10,000 employees in November. The layoffs will be the largest job cuts in the company’s history, according to The New York Times. The web retail giant previously implemented a hiring freeze, citing an “unusual macro-economic environment.”
Amazon’s consumers “are feeling the sting of inflation,” CNBC writes, leading to concerns about slowing growth. The company has closed a number of its in-person stores as well as limited its health-care service Amazon Care. Amazon’s stock also took a hit last month after “the Seattle-based company predicted that the holiday sales period would be the slowest in its history,” Bloomberg reports.
“Amazon will remain a powerhouse in retail and beyond,” retail analyst Neil Saunders said in a statement to The Washington Post. “However, it will no longer find growth so easy.”
Facebook, Instagram, and Whatsapp’s parent company, Meta, is planning to lay off 13 percent of its staff, or over 11,000 employees. The company has also extended its hiring freeze through the first quarter of 2023. Facebook made a risky decision to invest in the metaverse, a “flop” that has cost the company $9.4 billion so far in 2022, per CNBC. Meta’s expenses also increased 19 percent while sales dropped 4 percent.
Meta CEO Mark Zuckerberg took responsibility for the losses and apologized to the employees that would be impacted. He explained in a call to analysts that Meta would “focus [its] investments on a small number of high-priority growth areas.”
After Elon Musk took control of Twitter, he immediately ousted many of its top executives. Just a short while later, he laid off approximately half of Twitter’s workforce via email. Most recently, Musk reportedly laid off over 4,000 contract workers without giving them prior notice. The cuts came in many areas across the company, including content moderation and internal communications.
Musk purchased Twitter for $44 billion and has desperately sought a return on his investment. Musk claims the company has been losing $4 million per day, requiring him to make major job cuts. He has also sold billions worth of Tesla shares to pay Twitter’s debt.
Ride-sharing app Lyft announced a layoff of around 700 people at the beginning of November, citing a looming recession as the cause. However, the company actually only laid off 227 jobs.
Co-founders Logan Green and John Zimmer released a statement to their employees saying Lyft is “not immune to the realities of inflation and a slowing economy,” and that the company was making cuts “to ensure [it] can … stay focused on the best opportunities to drive profitable growth, and deliver strong business results in 2023 and beyond.”
Social media app Snapchat’s parent company Snap announced a layoff of 20 percent of its staff at the end of August. The company let go of over 1,200 people in a rather disorganized manner, including having employees meet with direct managers who read from a script, Insider reported.
Snap, like other tech companies, experienced a boom during the pandemic leading it to overhire. However, the company later faced major losses with its stock dropping by 80 percent and poor second-quarter earnings in 2022.
Stripe, an online payment processing company, is laying off 14 percent of its staff. The company was reportedly the most valuable start-up in 2021, valued at $95 billion, but has since been reduced to $74 billion in value, reports The Wall Street Journal. It processes billions of dollars worth of transactions per year, competing with Paypal and Block.
CEO Patrick Collison released a memo in which he said the company “need[s] to match the pace of … investments with the realities around us.” He acknowledged that Stripe made “two very consequential mistakes” by being too optimistic about economic growth and growing operating costs too quickly.
Microsoft announced layoffs in multiple divisions of the company in October. While not confirming the exact number of job losses, sources say that it was around 1,000, Axios reports. This is the company’s second round of layoffs in 2022, with a small number of workers being cut back in July.
The cuts reportedly were owed in part to fewer sales of Windows licenses for PCs this year. PC shipments also fell 13 percent in the third quarter of 2022 and overall growth has been the slowest in the last five years. “Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly,” Microsoft told Axios.