NEW DELHI: Tech firms in the US are firing employees and slowing down on hiring as they face higher interest rates and sluggish consumer spending in the US.
After a hiring spree during the pandemic, Amazon is now reportedly laying off 20,000 employees in the coming months across various verticals, including distribution centre workers, technology staff, and corporate executives.
Employees from all the rankings in the company, from Grades 1 to 7, are expected to be affected by the layoffs.
In November 2022, the New York Times reported that Amazon plans to lay off approximately 10,000 people, and “the cuts will focus on Amazon’s devices organisation, including the voice-assistant Alexa, as well as at its retail division and in human resources”. However, Computerworld, reported yesterday that the layoffs could impact nearly double the number of employees– roughly 6% of the company’s corporate employees and about 1.3% of its global workforce of more than 1.5 million composed primarily of hourly workers.
Amazon employees would receive a 24-hour notice and severance pay, in accordance with their company contracts.
On November 17, Amazon CEO Andy Jassy wrote a message to the employees, confirming that layoffs were taking place. He did not, however, specify the number of employees being laid off.
“This year’s review is more difficult due to the fact that the economy remains in a challenging spot and we’ve hired rapidly the last several years,” Jassy wrote.
“We haven’t concluded yet exactly how many other roles will be impacted (we know that there will be reductions in our Stores and PXT organizations), but each leader will communicate to their respective teams when we have the details nailed down. And, as has been the case this week, we will prioritize communicating directly with impacted employees before making broad public or internal announcements,” he said.
U.S.-based employers announced 76,835 job cuts in November, a 127% jump from the previous month, according to a report by Challenger, Gray and Christmas, and 417% higher than a year ago.
In October alone, 9,587 jobs were slashed in the tech sector, the highest monthly total since November 2020.
So far this year, employers in the US have announced plans to cut more than 320,000 jobs, a 6% increase from the nearly 303,000 cuts announced in the equivalent time period last year. About 80,000 of the cuts this year stem from the technology sector.
So why is Big Tech hurting and laying off workers?
For one, Goldman Sachhs Research says that revenue growth for the industry is normalizing after the pandemic, during which time the sector experienced heightened demand for its products and services. The other is that higher interest rates and tighter financial conditions disproportionately impact the sector because tech company profits are typically expected further out in the future and therefore subject to greater duration risk.
“Tech layoffs are therefore an unfortunate side effect of the growth slowdown and tighter financial conditions necessary to rebalance the broader labor market,” the researchers said, “but for now appear narrowly concentrated and are probably not indicative of labor market dynamic in other sectors.”
Amazon, Apple, DoorDash, Meta, Morgan Stanley, Lyft and Twitter are among the companies either implementing hiring freezes or letting workers go as the US Federal Reserve moves to raise interest rates at the fastest pace in decades in order to combat inflation. The high interest rates could trigger a recession, which could force consumers and ultimately businesses to pull back on spending.
In the FMCG space, PepsiCo is the latest to eliminate hundreds of corporate jobs in North America, according to the Wall Street Journal.
The layoffs will affect employees of its food and beverage businesses in Chicago; Plano, Texas and Purchase, New York, the Journal reported, citing people familiar with the matter and a company memo.
Several other food and beverage companies have also cut jobs, including Beyond Meat, Impossible Foods and PepsiCo’s main rival Coca-Cola.
Here are some of the major job cuts announced in recent weeks:
Meta Platforms:
The Facebook-parent said it would cut 13% of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year as it grapples with a weak advertising market and mounting costs.
Twitter:
The social media company laid off half its workforce across teams ranging from communications and content curation to product and engineering following Elon Musk’s $44 billion takeover.
However, Bloomberg on Sunday reported Twitter was reaching out to dozens of employees who lost their jobs, asking them to return.
The adjustments would start in the fourth quarter, Gelsinger said, but did not specify how many employees would be affected.
Microsoft:
The software giant laid off under 1,000 employees across several divisions this week, Axios reported, citing a source.
HP:
The computing devices maker said it expected to cut up to 6,000 jobs by the end of fiscal 2025.
Intel Corp:
Chief Executive Officer Pat Gelsinger told Reuters “people actions” would be part of a cost-reduction plan. The chipmaker said it would reduce costs by $3 billion in 2023.
Cisco Systems:
The networking and collaboration solutions company said it will undertake restructuring which could impact roughly 5% of its workforce. The effort will begin in the second quarter of the fiscal year 2023 and cost the company $600 million.
DoorDash:
The food delivery firm, which enjoyed a growth surge during the pandemic, said it was reducing its corporate headcount by about 1,250 employees.
Citigroup:
The bank eliminated dozens of jobs across its investment banking division, as a dealmaking slump continues to weigh on Wall Street’s biggest banks, Bloomberg News reported.
Morgan Stanley:
The Wall Street is expected to start a fresh round of layoffs globally in the coming weeks, Reuters reported on Nov. 3, as the Wall Street bank’s dealmaking business takes a hit.
Johnson & Johnson:
The pharmaceutical giant said it might cut some jobs amid inflationary pressure and a strong dollar, with CFO Joseph Wolk saying the healthcare conglomerate is looking at “right sizing” itself.
Lyft:
The ride-hailing firm said it would lay off 13% of its workforce, or about 683 employees, after it already cut 60 jobs earlier this year and froze hiring in September.
Warner Bros Discovery:
Film subsidiary Warner Bros. Pictures is planning to cut a number of jobs in distribution and marketing that will reduce headcount by 5% to 10%, Bloomberg News reported.
Beyond Meat:
The vegan meat maker said it plans to cut 200 jobs this year, with the layoffs expected to save about $39 million.
Stripe:
The digital payments firm is cutting its headcount by about 14% and will have about 7,000 employees after the layoffs, according to an email to employees from the company’s founders.
Chime Financial:
The online banking firm has laid off 12% of its employees, or about 160 jobs, a spokesperson said.
Opendoor Technologies:
The Property-selling platform is laying off about 550 employees, Chief Executive Officer Eric Wu said, adding that the company had already reduced its workforce by more than 830 positions.
Phillips 66:
The refiner reduced employee headcount by over 1,100 as it seeks to meet its 2022 cost savings target of $500 million. The reductions were communicated to employees in late October.
Chesapeake Energy Corp:
The US shale gas producer cut about 3% of its workforce, sources told Reuters, as the company readies a sale of South Texas oil properties.
With inputs from Agencies
After a hiring spree during the pandemic, Amazon is now reportedly laying off 20,000 employees in the coming months across various verticals, including distribution centre workers, technology staff, and corporate executives.
Employees from all the rankings in the company, from Grades 1 to 7, are expected to be affected by the layoffs.
In November 2022, the New York Times reported that Amazon plans to lay off approximately 10,000 people, and “the cuts will focus on Amazon’s devices organisation, including the voice-assistant Alexa, as well as at its retail division and in human resources”. However, Computerworld, reported yesterday that the layoffs could impact nearly double the number of employees– roughly 6% of the company’s corporate employees and about 1.3% of its global workforce of more than 1.5 million composed primarily of hourly workers.
Amazon employees would receive a 24-hour notice and severance pay, in accordance with their company contracts.
On November 17, Amazon CEO Andy Jassy wrote a message to the employees, confirming that layoffs were taking place. He did not, however, specify the number of employees being laid off.
“This year’s review is more difficult due to the fact that the economy remains in a challenging spot and we’ve hired rapidly the last several years,” Jassy wrote.
“We haven’t concluded yet exactly how many other roles will be impacted (we know that there will be reductions in our Stores and PXT organizations), but each leader will communicate to their respective teams when we have the details nailed down. And, as has been the case this week, we will prioritize communicating directly with impacted employees before making broad public or internal announcements,” he said.
U.S.-based employers announced 76,835 job cuts in November, a 127% jump from the previous month, according to a report by Challenger, Gray and Christmas, and 417% higher than a year ago.
In October alone, 9,587 jobs were slashed in the tech sector, the highest monthly total since November 2020.
So far this year, employers in the US have announced plans to cut more than 320,000 jobs, a 6% increase from the nearly 303,000 cuts announced in the equivalent time period last year. About 80,000 of the cuts this year stem from the technology sector.
So why is Big Tech hurting and laying off workers?
For one, Goldman Sachhs Research says that revenue growth for the industry is normalizing after the pandemic, during which time the sector experienced heightened demand for its products and services. The other is that higher interest rates and tighter financial conditions disproportionately impact the sector because tech company profits are typically expected further out in the future and therefore subject to greater duration risk.
“Tech layoffs are therefore an unfortunate side effect of the growth slowdown and tighter financial conditions necessary to rebalance the broader labor market,” the researchers said, “but for now appear narrowly concentrated and are probably not indicative of labor market dynamic in other sectors.”
Amazon, Apple, DoorDash, Meta, Morgan Stanley, Lyft and Twitter are among the companies either implementing hiring freezes or letting workers go as the US Federal Reserve moves to raise interest rates at the fastest pace in decades in order to combat inflation. The high interest rates could trigger a recession, which could force consumers and ultimately businesses to pull back on spending.
In the FMCG space, PepsiCo is the latest to eliminate hundreds of corporate jobs in North America, according to the Wall Street Journal.
The layoffs will affect employees of its food and beverage businesses in Chicago; Plano, Texas and Purchase, New York, the Journal reported, citing people familiar with the matter and a company memo.
Several other food and beverage companies have also cut jobs, including Beyond Meat, Impossible Foods and PepsiCo’s main rival Coca-Cola.
Here are some of the major job cuts announced in recent weeks:
Meta Platforms:
The Facebook-parent said it would cut 13% of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year as it grapples with a weak advertising market and mounting costs.
Twitter:
The social media company laid off half its workforce across teams ranging from communications and content curation to product and engineering following Elon Musk’s $44 billion takeover.
However, Bloomberg on Sunday reported Twitter was reaching out to dozens of employees who lost their jobs, asking them to return.
The adjustments would start in the fourth quarter, Gelsinger said, but did not specify how many employees would be affected.
Microsoft:
The software giant laid off under 1,000 employees across several divisions this week, Axios reported, citing a source.
HP:
The computing devices maker said it expected to cut up to 6,000 jobs by the end of fiscal 2025.
Intel Corp:
Chief Executive Officer Pat Gelsinger told Reuters “people actions” would be part of a cost-reduction plan. The chipmaker said it would reduce costs by $3 billion in 2023.
Cisco Systems:
The networking and collaboration solutions company said it will undertake restructuring which could impact roughly 5% of its workforce. The effort will begin in the second quarter of the fiscal year 2023 and cost the company $600 million.
DoorDash:
The food delivery firm, which enjoyed a growth surge during the pandemic, said it was reducing its corporate headcount by about 1,250 employees.
Citigroup:
The bank eliminated dozens of jobs across its investment banking division, as a dealmaking slump continues to weigh on Wall Street’s biggest banks, Bloomberg News reported.
Morgan Stanley:
The Wall Street is expected to start a fresh round of layoffs globally in the coming weeks, Reuters reported on Nov. 3, as the Wall Street bank’s dealmaking business takes a hit.
Johnson & Johnson:
The pharmaceutical giant said it might cut some jobs amid inflationary pressure and a strong dollar, with CFO Joseph Wolk saying the healthcare conglomerate is looking at “right sizing” itself.
Lyft:
The ride-hailing firm said it would lay off 13% of its workforce, or about 683 employees, after it already cut 60 jobs earlier this year and froze hiring in September.
Warner Bros Discovery:
Film subsidiary Warner Bros. Pictures is planning to cut a number of jobs in distribution and marketing that will reduce headcount by 5% to 10%, Bloomberg News reported.
Beyond Meat:
The vegan meat maker said it plans to cut 200 jobs this year, with the layoffs expected to save about $39 million.
Stripe:
The digital payments firm is cutting its headcount by about 14% and will have about 7,000 employees after the layoffs, according to an email to employees from the company’s founders.
Chime Financial:
The online banking firm has laid off 12% of its employees, or about 160 jobs, a spokesperson said.
Opendoor Technologies:
The Property-selling platform is laying off about 550 employees, Chief Executive Officer Eric Wu said, adding that the company had already reduced its workforce by more than 830 positions.
Phillips 66:
The refiner reduced employee headcount by over 1,100 as it seeks to meet its 2022 cost savings target of $500 million. The reductions were communicated to employees in late October.
Chesapeake Energy Corp:
The US shale gas producer cut about 3% of its workforce, sources told Reuters, as the company readies a sale of South Texas oil properties.
With inputs from Agencies
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