Tech layoffs are dominating newsfeeds and headlines, and the cuts are coming across the board — Twitter’s sacking workers in droves, while Meta (META) is reportedly set to conduct large-scale cuts as soon as this week.
This isn’t the first round of tech layoffs since the end of the pandemic, but this time the cuts aren’t sector-specific. Everyone’s getting slammed, said Roger Lee, founder of Layoffs.fyi, a site that tracks the cutbacks.
“Earlier in the year, layoffs in tech were concentrated within food, transportation, and finance startups — but at this point it’s hitting every sector within tech,” he told Yahoo Finance.
CompTIA Chief Research Officer Tim Herbert said the cuts are related to the broader macroeconomic climate, which has taken a turn for the worse as the Fed continues to hike rates in an attempt to fight inflation.
“The Federal Reserve remains intent on slowing the economy, so some corresponding degree of slowing in the labor market is inevitable,” he said.
Though layoffs are rising, tech employment data is telling a slightly more optimistic story. According to Herbert, tech job postings for the month came in at 317,000, signaling robust hiring activity for tech talent across many sectors.
“Tech unemployment was essentially unchanged at 2.2%, which continues to signal a tight labor market with few tech workers sitting on the sidelines,” he said. “The tech sector is expansive with many different company types and business models, but generally, those with the strongest business models tend be more enterprise technology focused or with stable cash flow.”
Yahoo Finance has compiled an ongoing list of recent tech layoffs — one that’s likely to keep growing, Lee said. “The pain won’t end until the Fed’s able to get a handle on inflation.”
Amazon
Amazon (AMZN) has put a hold on “new incremental hires in [its] corporate workforce,” the company said in a statement on Nov. 3. In October, the e-commerce giant put a hold on hiring in for its retail business.
Amazon experienced explosive growth during the pandemic as shoppers flocked to the online retailer for everything from toilet paper to video games. But the company over-expanded, and CEO Andy Jassy is looking for ways to cut costs, including subletting parts of its warehouses.
Lyft
Ride sharing service Lyft (LYFT) is laying off 683 employees, or 13% of its workforce, the company said in a Nov. 3 Securities and Exchange Commission (SEC) filing. This is the second time in less than a year that Lyft has passed out pink slips. In July, the firm laid off 60 employees from its rental division. According to Lyft, the latest move will cost the company $27 million to $32 million in restructuring and charges for employee severance and benefits.
Meta
Meta (META) is reportedly set to announce “large-scale” layoffs as soon as this week. The Facebook parent has about 87,000 employees, and the layoffs could affect thousands of those workers. Meta’s stock has been in free fall for months, as a drop in advertiser spending and Apple’s iOS privacy changes bite into the company’s revenue. In Q3, the company reported its second ever year-over-year revenue decline.
At the same time, Meta CEO Mark Zuckerberg is attempting to pivot his social media empire into a metaverse-first company. The transition, however, is costing the firm billions, and the price, he says, will only increase in 2023.
Opendoor
Opendoor (OPEN) laid off about 550 people, or 18% of the company’s employees, CEO Eric Wu announced in a blog post on Nov. 2. The real–estate tech company went public via SPAC in December 2020; Opendoor’s shares are down about 84% year-to-date.
Qualcomm
While not laying off employees, chip giant Qualcomm (QCOM) has announced a hiring freeze to deal with the slowdown in smartphone sales. Qualcomm CEO Cristiano Amon announced the freeze during the company’s Q4 earnings report, during which the company revealed lower-than-expected guidance for Q1.
While Amon didn’t mention job cuts, he did say that the chip designer is prepared to further reduce operating expenses if need be.
Snap
Snap (SNAP) cut roughly 20% of its workforce in August as it continues to struggle with slowing ad sales. The company saw revenue growth of just 6% in Q3, its slowest ever. Still, daily active users increased by 19%, to 363 million.
Advertisers are pulling back on ad sales as interest rates, inflation, and currency fluctuations hit corporate budgets. And that, in turn, is hitting Snap’s bottom line. It’s not just ad sales, though. Apple’s iOS privacy changes are also still impacting the company, and its cohorts, making it more difficult for advertisers to specifically target potential customers.
Stripe
In a Nov. 3 email to employees, Stripe CEO Patrick Collison announced that the company is laying off 14% of its total workforce. In the message, Collison explained that the payment processing company hired too many employees and blamed the broader macroeconomic environment for the decision.
The company said it will provide impacted workers with two weeks of severance pay, 2022 bonuses, pay out paid time-off, and pay the cash equivalent of 6 months of healthcare premiums.
Just a week after taking the reins at Twitter, Elon Musk has halved the company’s workforce, laying off roughly 3,800 employees. After the announcement, Musk said that he needed to make the move because Twitter is losing $4 million per day.
After the layoffs, Twitter reportedly asked a number of employees to return to the company because they were too important to certain operations.
Got a tip? Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks.
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Source: https://finance.yahoo.com/news/twitter-meta-lyft-and-more-another-wave-of-layoffs-hits-tech-182545675.html