The tech industry’s moment of reckoning: layoffs and hiring freezes

3 weeks ago 42

It feels like every day, we hear news of mass layoffs and hiring freezes from big tech companies that were formerly famous for having deep pockets and near-endless amenities for workers. Now, it’s clear that the industry as a whole is tightening its belt, leaving hundreds of thousands of employees out of work — and more wondering if they’ll have a job within the next few months or searching for jobs in an industry that no longer has a spot for them. It’s gotten to the point where one tech recruiting site created an interactive tool to track the layoffs across established companies and startups.

It’s impossible to blame the wave of large-scale layoffs on any one factor. Twitter’s layoffs happened because Elon Musk bought the company and took it private, and Meta’s CEO claims its 13 percent reduction in staff is a course correction after the company went on a hiring spree during the online retail boom that came out of the pandemic. Companies that rely on advertising, like Meta and Snap, have also been hit hard by privacy policy changes from Apple. Meanwhile, the iPhone maker is blaming the economy for its own hiring slowdown, despite being one of the few companies still announcing record-breaking earnings and beating estimates.

We’ll probably see even more reasons for layoffs or freezes as other companies announce their own. Stay tuned to this page for the latest on big tech companies’ cost-cutting measures and how they affect current and former employees.

Here’s all our coverage of the recent outbreak of layoffs from big tech, auto, crypto, and more:

  • Apple’s market cap is down $1 trillion from its peak exactly one year ago.

    On January 3rd, 2022, the value of Apple’s shares briefly crossed $3 trillion.

    Today, on January 3rd, 2023, the value of $AAPL shares fell to 125.07 at the market’s close, a 52-week low that sets its market cap at a frankly piddling $1.99 trillion. It was the last holdout in the club, following Microsoft and Saudi Aramco’s exits last year, but now analysts are predicting a slight decline in revenue when Apple releases its latest quarterly earnings report in a few weeks.

    The share price is down amid greater economic and interest rate concerns (see, it’s not just Tesla and crypto taking a beating), as well as gloomy news about both iPhone production and demand.

  • Micron will cut 10 percent of its workforce next year.

    The chipmaker announced the plan as part of its earnings report on Wednesday, saying the reduction would come from “a combination of voluntary attrition” and layoffs throughout 2023. The company also won’t be doing bonuses next year and says that executive salaries will be cut too.

    Micron recently reported it has 48,000 employees, according to CNBC, meaning around 4,800 positions could be affected.

    Like Intel, which has planned its own layoffs, Micron is investing billions in building new US fabs.

  • Some ex-Meta employees say they’re not getting full severance.

    A group of former Meta employees say they’re only receiving eight weeks of base pay and three months of COBRA as severance — half of what CEO Mark Zuckerberg promised when the mass-layoffs were announced, according to CNBC.

    The full-time, non-contract workers, who were in a Meta apprenticeship program, say the company hasn’t responded to their questions with an answer on whether the discrepancy is intentional.

  • GameStop is reportedly cutting more jobs.

    Axios reports GameStop has begun another round of layoffs. The scale of the layoff is unclear, but Axios says the blockchain team was “heavily impacted.” In an email to employees obtained by Kotaku, CEO Matt Furlong said the decision to lay off staff was due in part to high inflation and “weakened consumer confidence.”

    The company, which gained a lot of notoriety as a meme stock, laid off staff and fired its CFO in July.

  • Job cuts are coming to a Silicon Valley original.

    HP, one of the world’s largest PC vendors, according to data from Gartner, announced in an earnings report that it’ll lay off 4,000 to 6,000 employees by the end of 2025. According to numbers cited by CNBC, that’s between seven and 11 percent of its workforce.

    This is just the latest in a series of large tech layoffs, not to mention that the PC market has also had an especially rough year following a pandemic boom.

  • Alexa isn’t pulling its weight.

    Internal documents obtained by Insider indicate that Amazon’s Alexa division made up the “vast majority” of the over $3 billion that the company lost across its “Worldwide Digital” department, which includes Alexa, Echo devices, Prime Video, and other products.

    Amazon confirmed layoffs affecting thousands of employees on its hardware and services teams last week, and the company’s CEO says to expect even more job cuts next year.

  • Amazon employees are still waiting to hear if they’ll keep their jobs.

    Were you expecting Amazon to simply announce its expected 10,000 layoffs? Recode writes that the company’s swinging the ax quietly instead — quietly enough that many don’t know what’s going on. Meanwhile, “large swaths of the company’s HR division” are receiving voluntary buyout offers.

    More at Recode:

  • The Amazon layoffs have started.

    After reports that Amazon plans to lay off 10,000 workers this week, CNBC and The Washington Post are reporting that some workers there are being informed they will need to find another job with the company soon or accept a severance payment. Neither outlet mentioned how many people were affected today, and so far there haven’t been any companywide notifications.

    From the Post:

    Amazon employees were called into meetings with their managers across the country Tuesday, and many were told they had two months to find another job internally or accept severance payment.

  • Ask A Manager has weighed in.

    A nervous Twitter employee, whose boss and coworkers are now gone, has written to the popular work advice column Ask A Manager, asking how the heck they should handle their company’s whole...situation.

    Columnist Alison Green’s advice: Stick it out, if you can. “Staying at least gives you the option of severance down the road...and gives you an ongoing income and health insurance,” Green wrote. She added, “I’m sorry something you helped build is being needlessly destroyed.”

  • Tim Cook confirms that Apple’s slowing down on hiring.

    In an interview with CBS Mornings, Apple CEO Tim Cook confirms the company is now being very “deliberate” in its hiring and that it’s only bringing new staff members on board in certain departments.

    We believe strongly in investing for the long term and we don’t believe you can save your way to prosperity. We think you invest your way to it.

    In July, Bloomberg reported Apple planned to slow hiring in 2023 and that not-quite-a-freeze may be setting in early, while other Big Tech companies like Amazon, Google, Meta, and Microsoft undergo their own hiring freezes and layoffs.

  • Twitter’s layoff notices in Africa are missing something.

    Elon Musk’s mass layoffs at Twitter included severance payment for some workers, and Musk himself said in a tweet that “Everyone exited was offered 3 months of severance, which is 50% more than legally required.”

    However, CNN reports termination letters sent to staff at Twitter’s only office in Africa didn’t include their names or mention any next steps or severance, only saying they will be paid until December 4th.

  • Meta layoffs are starting tomorrow, and they’re going to be bad.

    “Many thousands of employees” are set to be laid off, The Wall Street Journal reported, especially on the recruiting and business teams. Mark Zuckerberg is blaming overstaffing based on inflated growth plans, and has said he’s “accountable” for the mistakes. (Safe to assume he will not be getting laid off, though.)

    Those who lose their job should be finding out tomorrow morning, and will reportedly get at least four months’ severance.

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