Tech industry is in a state of shock due to a combination of a poor economy, the COVID-19 pandemic and some business mistakes. While this led to job losses in 2022, headcount reductions in 2023 have unfortunately increased. It can be difficult to keep track of all these changes so we have compiled all major layoffs in one location and will continue updating as the situation changes.
Google (Alphabet) layoffs
Google’s parent company Alphabet had been cutting costs for some time, with closing down Stadia. But it went one step further in January, when it announced that it would layoff 12,000 employees. Sundar Pichai, CEO of Google, was not shy about explaining the reason. Alphabet had been hiring to meet a “different economic reality” and was reorganizing to concentrate on its most important businesses. The company’s Area 120 incubation was hit particularly hard by the decision, with most of its workers losing their jobs. In the days preceding the mass layoffs, sub-brands such as Intrinsic (robotics), and Verily (health) saw significant reductions in their workforce.
Amazon had already laid off employees last fall. But, it increased those cuts in January, when it announced it would remove 18,000 jobs. Most of these were from recruiting and retail teams. No one was surprised that CEO Andy Jassy blamed the “uncertain economy” as well as rapid hiring in recent decades. Amazon has benefited greatly from this pandemic, as more people shop online. However, its growth is slowing due to people returning to physical stores.
Microsoft announced that it would lay off 10,000 employees in the second largest wave of layoffs it has ever seen. This was between mid-January to the end of March. It was also cutting costs because customers reduced their spending, especially on Windows and other devices, during the pandemic recovery. Some divisions suffered the most — they reportedly destroyed the HoloLens and mixed-reality teams , while 343 industries is thought to be restarting Halo development after losing many workers.
Coinbase was among the largest companies that were affected by the 2022 crypto market downturn. This trend continued into the new year. Mid-January saw the cryptocurrency exchange lay off 950 people, only months after it had cut 1,100 roles. Coinbase laid off about a fifth its staff in this cut, which is the largest among large tech companies. Chief Brian Armstrong stated that his company needed to reduce operating expenses and survive what was previously called a “crypto winter.” However, this also meant that some projects were cancelled that were less likely of succeeding.
Amazon isn’t the only online retailer that will be closing its doors in 2023. Wayfair announced in January that it would layoff 1,750 employees or 10% of its global workforce. Around 1,200 were corporate staff who were being cut to “eliminate layers of management” and make the company more agile and leaner. Wayfair, which had been cutting costs since August 2022 (870 positions), saw the layoffs in a way that would help it reach breakeven sooner than expected.
PayPal is one of the largest tech companies that has performed well. It beat expectations during its third quarter. It hasn’t been immune from a difficult economy. The plans to layoff 2,000 employees were announced by the online payment company at the end January. This is seven percent of its total workforce. CEO Dan Schulman stated that the downsizing would reduce costs and allow PayPal to focus on its “core strategic priorities.”
SAP, a business software giant, saw a sharp drop in profits of 68 percent at the end 2022. It also started 2023 by cutting 2,800 employees to maintain its business’s health. SAP did not blame its cutbacks on excessive pandemic-era recruitment, unlike other tech giants. It characterized the initiative instead as a “targeted reorganization” that was being done for a company expecting to see accelerated growth in 2023.
Spotify has spent heavily in recent years to expand its podcast empire . But it soon stopped that practice as 2023 started. In late January, Spotify announced that it would layoff 6 percent of its workforce (a total of 9,800 employees at Spotify as of the third-quarter). This was in addition to a restructuring that saw Dawn Ostroff leave the company’s content chief. While Premium subscribers were higher than ever in 2022 but the company also suffered severe losses – CEO Daniel Ek stated that he was too ambitious to invest before there was enough revenue.
Sometimes layoffs are more due to corporate strategy changes than financial hardship. IBM was a prime example in 2023. After selling its AI-driven Watson Health business, as well as its infrastructure management division (now Kyndryl), in the fall, the computing pioneer had to axe 3,900 jobs. These employees were left with nothing to do as IBM switched to cloud computing.
The tone was set for 2023 by Salesforce when it announced that it would layoff 8,000 employees (or about 10% of its workforce) within four days of the start to the new year. Despite the fact that the cloud software company was able to grow its revenue rapidly during the pandemic, it acknowledged that it had hired too many people during the boom and could not maintain that level of staffing while the economy was declining.