From Meta Platforms Inc. to Twitter, big names in the tech sector have announced major layoffs in October and November.
Facebook parent Meta
is cutting 11,000 employees, or about 13% of its workforce, in the first layoffs in the company’s 18-year history. Chief Executive Mark Zuckerberg has taken responsibility for the cuts, admitting to expanding the company too quickly amid a pandemic-fueled surge in revenue.
“Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected,” he wrote in a post on the company’s public newsroom. “I got this wrong, and I take responsibility for that.”
Zuckerberg wrote that while Meta will be making reductions in every area across both its Family of Apps and Reality Labs segments, some teams will be affected more than others. The cuts to Reality Labs will be closely watched for any potential impact on the company’s bold metaverse strategy, which is handled within the segment.
Meta’s job cuts came hot on the heels of layoffs at Twitter that affected about half of that company’s 7,500 employees. In late October, after a monthslong struggle, Elon Musk bought Twitter for the inflated price of $44 billion and quickly launched an effort to slash costs at the unprofitable company.
Before the layoffs hit, Twitter faced a class-action lawsuit over lack of notice to employees.
The cuts, which came just before the midterm elections, have also sparked concern about the microblogging site’s ability to fight misinformation in the postelection period.
In November, Lyft Inc.
announced plans to lay off 13% of its workforce, or about 683 employees. The ride-hailing company’s executives described the move as a proactive step as they eye a possible recession and plan for the coming year.
The latest layoffs follow 60 job cuts in July; a hiring freeze through the end of the year was also implemented in September. In April 2020, in the early days of the pandemic, Lyft laid off nearly 1,000 employees and put another 288 on furlough.
In October, Intel Corp.
announced plans for job cuts as it reported its third-quarter results. The chip maker said it is focused on driving $3 billion in cost reductions in 2023. “Inclusive in our efforts will be steps to optimize our headcount,” chief executive Pat Gelsinger said during a conference call with analysts to discuss the third-quarter results.
Some companies confirmed their layoffs earlier this year. In August, Snap Inc.
announced job cuts as part of a “broader strategic reprioritization” that would see the social-media company focus on cost cuts and aim for profit and positive free cash flow. The company said it would cut about 20% of its full-time employees.
“The scale of these changes vary from team to team, depending upon the level of prioritization and investment needed to execute against our strategic priorities,” said Snap Chief Executive Evan Spiegel in a statement. “The extent of this reduction should substantially reduce the risk of ever having to do this again, while balancing our desire to invest in our long-term future and reaccelerate our revenue growth.”
The Verge reports that Snap had more than 6,400 employees prior to the job cuts.
Also in August, Robinhood Markets Inc.
announced plans to cut its workforce by 23%. The company, which was a launchpad for 2021’s meme-stock phenomenon, cited a weaker economic environment and depressed trading activity.
In July, Coinbase Global Inc.
announced plans to lay off 18% of its employees, just two weeks after extending a hiring freeze and rescinding some job offers. In a blog post, CEO Brian Armstrong said the decision was made “to ensure we stay healthy during this economic downturn.”
The crypto exchange had expanded rapidly, from 1,250 employees at the beginning of 2021 to 4,948 at the end of March 2022. “I am the CEO, and the buck stops with me,” said Armstrong, adding that the company grew too rapidly.
Also in July, Shopify Inc.
announced plans to lay off 10% of its staff, with the e-commerce company citing an evolving business landscape. In a blog post, Chief Executive Tobi Lütke explained that, as a result of the pandemic, Spotify had bet that the share of dollars going through e-commerce rather than physical retail would permanently leap ahead by five or even 10 years. “It’s now clear that bet didn’t pay off,” he wrote. “What we see now is the mix reverting to roughly where pre-COVID data would have suggested it should be at this point.”