Meta to eliminate thousands of jobs within days, including teams working on Mark Zuckerberg’s Metaverse
Technical cutbacks – including mass redundancies at Meta and Twitter
A number of tech companies have announced cost-cutting measures in 2022, with Amazon, Apple and Google parent Alphabet all announcing cuts or hiring freezes.
For the tech sector, the pandemic boom turned into a post-pandemic bust, as rising interest rates hit stock prices and inflation cuts into profits.
The sector lost 9,587 jobs in October, the highest monthly total since November 2020, according to data from consulting firm Challenger, Gray & Christmas cited by Bloomberg.
Total layoffs announced by U.S.-based employers jumped 1[ads1]3 percent to 33,843 in October, the highest since February 2021, a report said.
The Facebook parent said in November it would cut 13 percent of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year, as it struggles with a weak ad market and rising costs.
Like its peers, Meta hired aggressively during the pandemic to address a surge in social media use by consumers stuck at home.
But the pandemic boom faded as advertisers and consumers pulled the plug on spending in the face of skyrocketing costs and rapidly rising interest rates.
After throwing billions into CEO Mark Zuckerberg’s Metaverse vision with little to show for it, Meta has been faced with rising costs and shrinking profits.
Meta, once worth more than $1 trillion, lost about 70 percent of its value last year alone. Shares have retreated in 2023, but remained below the peak in early March.
“Not only has online commerce reverted to previous trends, but the macroeconomic downturn, increased competition and loss of ad signals have resulted in our revenue being much lower than I had anticipated,” Zuckerberg said in a message to employees.
“I got this wrong and I take responsibility for it.”
On a brief call, a red-eyed Zuckerberg addressed employees but took no questions.
He stuck to a script that closely followed the wording of this morning’s blog post and called the increased investment in e-commerce a ‘big mistake in planning.’
Twitter laid off half its workforce across teams ranging from communications and content curation to product and engineering following Elon Musk’s $44 billion takeover.
The cuts affected roughly 3,700 employees, who learned their fate by email last week.
In January, cloud-based software company Salesforce announced that it would lay off 10 percent of its employees, or about 8,000 workers.
CEO Marc Benioff cited a tough period for the tech sector as well as over-hiring during COVID-19 that led to the decision.
“Our sales performance process drives accountability. Unfortunately, that can lead to someone leaving the business, and we’re supporting them through their transition,” a Salesforce spokesperson said.
Salesforce had 73,541 employees at the beginning of last year – it is the largest employer in the San Francisco area.
The company said in an August filing that the number of employees increased by 36 percent in the past year “to meet the higher demand for services from our customers.”
Amazon said it would cut 18,000 corporate and technology jobs, in what would be the biggest job cuts in the company’s history.
The move comes as the company reportedly lost $1 trillion over the year after its stock fell from a peak during the pandemic.
The move comes after the company instituted a hiring freeze, affecting major teams including Prime Video, Alexa and Amazon Fresh.
“We are facing an unusual macroeconomic environment and want to balance our hiring and investments with being thoughtful about this economy,” Beth Galetti, senior vice president of people experience and technology at Amazon, wrote in a note.
Intel Corp CEO Pat Gelsinger told Reuters that “people actions” would be part of a cost-cutting plan.
The chipmaker recently said it would cut costs by $3 billion in 2023, then increase costs to $10 billion by 2025.
The adjustments will begin in the fourth quarter, Gelsinger said, but did not specify how many employees would be affected.
Some Intel divisions, including the sales and marketing group, could be cut by up to 20 percent, Bloomberg News reported last month, citing people with knowledge of the situation.
The company had 113,700 employees in July, when it cut its annual sales forecast by $11 billion after missing estimates for second-quarter results.
Intel, based in Santa Clara, California, declined to comment on the job cuts when DailyMail.com reached them in October.
Intel has been hit by changing market trends, including the decline of traditional personal computers as smartphones and tablets gain popularity.
Last quarter, global PC shipments, including desktops and laptops, fell another 15 percent from a year ago, according to IDC.
In January, Microsoft began layoffs of 10,000 employees, citing reduced customer demand and a negative economic environment.
“We also see organizations across all industries and geographies exercising caution as some parts of the world are in a recession and other parts are anticipating one,” CEO Satya Nadella said in a company note.
The layoffs affected nearly 5 percent of Microsoft’s global workforce.
Microsoft previously laid off less than 1,000 employees in several divisions last year, according to Axios.
In a statement, Microsoft executives said: “Like all companies, we periodically evaluate our business priorities and make structural adjustments accordingly.
“We will continue to invest in our business and hire in key growth areas in the coming year.”
Microsoft executives announced earlier in July that they were laying off less than 1 percent of their workforce and hiring significantly slowly, as revenue fell short of investors’ expectations.
The company recorded just $51.9 billion in revenue during the year’s second quarter, but was expected to bring in $52.4 billion.
It had previously seen major growth during the COVID pandemic, as consumers and businesses turned to its products as they transitioned to work from home.
Ride-hailing company Lyft said it would lay off 13 percent of its workforce, or about 683 employees, after it already cut 60 jobs and froze hiring in September.
Lyft said in a regulatory filing that it will likely incur $27 million to $32 million in restructuring costs related to the layoffs.
“We are not immune to the realities of inflation and a slowing economy,” Lyft’s founders wrote in the memo to employees.
The company’s share price has fallen 76 percent since the beginning of the year and was $9.75 on March 6, compared to almost $45 in January 2022.
Lyft has about 4,000 employees, not including its drivers.
The music streaming service said Jan. 22 that it plans to cut 6% of its workforce, an estimated 588 employees from its 9,800 full-time employees.
Spotify said it will incur about $38 million in severance-related fees.
The company, whose CEO is Daniel Ek, said its head of content and advertising operations, Dawn Ostroff, will also leave.
Although Apple has yet to announce any major layoffs, CEO Tim Cook told CBS Mornings that it is also slowing hiring somewhat.
“What we’re doing as a consequence of being in this period is we’re being very deliberate in our hiring,” he said. “That means we continue to hire, but not everywhere in the company we hire.”
At the same time, however, Cook said “we don’t think you can save the road to prosperity.”
“We think you invest in it,” he said.