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After a year in which technology companies announced massive layoffs, 2023 is looking no different — in fact, the year is starting off worse than 2022.
The problem: big tech companies like Amazon, Oracle, Microsoft, Salesforce and Facebook went on a hiring binge during the pandemic when lockdowns sparked a tech buying spree to support remote work and an uptick in e-commerce, and now they face revenue declines.
It's not only tech giants who are conducting layoffs. Smaller tech firms were also caught up in pandemic-generated hypergrowth and are now suffering the consequences.
Although global IT spending is forecast to rise in 2023, with enterprise software and IT services experiencing the greatest growth, the overall increase is expected to be modest, with data center systems and communications services growing by less than 1 per cent, according to market research firm Gartner. Meanwhile hardware sales are forecast to decline.
Continuing supply chain issues, inflation, and the war in Ukraine are also having an impact on both business and consumer spending, leading to fears of recession.
According to data compiled by Layoffs.fyi, the online tracker keeping tabs on job losses in the technology sector, more employees at tech companies have been laid off in January than in any other month since the start of the pandemic.
Employers in the tech sector collectively cut more than 150,000 jobs in 2022 — and in just the first three week of 2023, layoffs climbed to more than 30% of that figure.
While high-profile tech companies such as Amazon and Microsoft have already announced significant job cuts this year, the silver lining for technology pros is that many of the layoffs involve non-technical staff.
In fact, a lack of experienced tech talent means companies have been raising salaries for IT professionals, with consultancy Janco Associates predicting that raises for IT pros could jump 8% in 2023.
Here is a list — to be updated regularly — of some of the most prominent technology layoffs the industry has experienced recently. You can find our 2022 layoff’s tracker here.
January 2023
On 18 Jan, Microsoft CEO Satya Nadella confirmed in a blog post that the company would be cutting almost 5% of its workforce, impacting 10,000 employees.The chief executive chalked up the downsizing maneuver to aligning its cost structure with its revenue structure while investing in areas that the company predicts will show long-term growth.
The Seattle-based tech giant reported its slowest growth in five years for the first quarter of its fiscal 2023, due largely to a strong US dollar and an ongoing decline in personal computer sales, causing net income to fall by 14% to $17.56 billion from this time last year. Rising cloud revenue helped to soften Microsoft's growth slowdown.
16 January – Google-backed ShareChat lays off 20% of staff
Google-backed, India-based social media startup ShareChat said it is laying off 20% of its workforce to prepare for oncoming economic headwinds.
“The decision to reduce employee costs was taken after much deliberation and in light of the growing market consensus that investment sentiments will remain very cautious throughout this year,” a spokesperson said.
The move is expected to impact over 400 employees out of the company’s approximately 2,200 staffers. The company did not disclose the roles and the exact number of workers affected by the decision.
13 January – Alphabet robotics subsidiary Intrinsic lays off 20% of staff
Alphabet, Google's corporate parent, also announced there would be layoffs at its Mountain View, California-based robotics subsidiary Intrinsic AI, eliminating around 20% of its workforce or roughly 40 employees.
“This (downsizing) decision was made in light of shifts in prioritisation and our longer-term strategic direction.
It will ensure Intrinsic can continue to allocate resources to our highest priority initiatives, such as building our software and AI platform, integrating the recent strategic acquisitions of Vicarious and OSRC (commercial arm Open Robotics), and working with key industry partners,” according to a company statement.
12 January – Alphabet-owned Verily cuts 15% of workforce
Verily — a life sciences firm also owned by Alphabet and headquartered in San Francisco — is downsizing its workforce by 15% to simplify its operating model. The move comes just months after the company raised $1 billion.
According to an email sent by CEO Stephen Gillett to all its employees, the downsizing is part of the company’s One Verily program, which aims to reduce redundancy and simplify operational aspects within the company.
As part of the new One Verily program, the company said it will move from multiple lines of business to one centralised product organisation with increasingly connected healthcare systems.
11 January – Informatica to lay off 7% of its workforce to cut costs
Enterprise data management firm Informatica announced plans to lay off 7% of its total workforce through the first quarter of 2023, the company said in a filing with the US Securities and Exchange Commission.
The move by Informatica, headquartered in Redwood City, California, will incur nonrecurring charges of approximately $25 million to $35 million in the form of cash expenditures for employee transition, notice period, severance payments and employee benefits, the company filing showed.
The company said it expects the layoffs to be completed by the first quarter of 2023 but added that there might be limited exceptions.
4 January – Salesforce to cut 8,000 in restructuring plan
At the beginning of 2023, San-Francisco based Salesforce announced it will lay off about 10% of its workforce, roughly 8,000 employees, and close some offices as part of a restructuring plan.
In a filing with the US Securities and Exchange Commission (SEC), the company disclosed that its restructuring plan calls for charges between $1.4 billion and $2.1 billion, with up to $1 billion of those costs being shouldered by the company in the fourth quarter of 2023.
In a letter sent by Salesforce’s co-CEO Marc Benioff and attached to the SEC filing, he told employees that as Salesforce’s revenue accelerated through the pandemic, the company over-hired and can no longer sustain its current workforce size due to the ongoing economic downturn. “I take responsibility for that,” Benioff said.
4 January – Amazon confirms more than 18,000 employees to be laid off
Seattle-based tech behemoth Amazon said it would be laying off more than 18,000 staff, with the bulk of job cuts coming later this month.
The news confirmed a December Computerworld article reporting that Amazon layoffs were expected to mount to about 20,000 people at all levels.
While several teams are impacted, the majority of the job cuts will be in the Amazon Stores and People, Experience, and Technology (PXT) organisations.
According to a note from CEO Andy Jassy, the layoffs are a result of “the uncertain economy.” He also said that Amazon had “hired rapidly over the last several years,” but added that the layoffs will help the company pursue more long-term opportunities with a stronger cost structure.
