Over 40,000 workers in the tech industry lost their jobs so far this year. (Image Credit: Mohamed_hassan/pixabay)
According to layoffs.fyi, over a quarter million tech-industry workers have been laid off by 1,056 tech companies so far this year. By monitoring these layoffs, many of which occurred due to costs, we can see how they affect business, companies facing pressures, and who could be hired for rapidly thriving businesses.
It isn’t clear what the main catalyst behind the layoffs is exactly, but artificial intelligence is probably playing a huge roll. Here is a rundown of the major layoffs.
Roku:
(Image Credit: Roku)
On Sept. 6, Roku announced plans to lay off 10% of its staff, accounting for over 300 workers. This decision comes into play as the company seeks ways to cut rapidly increasing operating expenses. The TV streaming company's annual filing says it had around 3,600 full-time employees working in fourteen countries at the end of 2022.
Roku started laying off workers in March this year when it let go of 200 employees (6% of its staff) to reduce costs. Additionally, these layoffs meant the company plans to spend $45 million to $65 million in this quarter for severance and benefits costs. It also expects a $55 million - $65 million impairment charge for content portfolio changes and $160 million - $200 million since it expects to stop using certain office buildings.
Microsoft:
(Image Credit: trazika/pixabay)
Microsoft also joined other tech companies in reducing workforces. In its January 18th blog post, the tech giant announced plans to lay off 10,000 employees to "align our cost structure with our revenue and where we see customer demand," wrote Microsoft CEO Satya Nadella. This represented 5% of its entire workforce (220,000 workers). However, the letter didn't mention which roles would see an impact. The January 18th job cuts affected those involved with Microsoft Edge, HoloLens, and marketing teams. Nadella didn't mention which roles would have new hires but said AI advancements would become the new wave of computing.
"While we are eliminating roles in some areas, we will continue to hire in key strategic areas," Nadella also said. He mentions using AI to build a new computing platform as well. "We're also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one."
On Jul. 10, the company filed a notice with the Washington State Worker Adjustment and Retraining Notification (WARN) system to lay off 276 employees at the Redmond and Bellevue locations. Sixty-six of those jobs are remote-based. This impacted employees in customer sales, service, and support. Those who lost their jobs posted about it on LinkedIn, which explained these losses.
Niantic:
Pokemon Go developer Niantic issued a statement on its website stating plans to let go of 230 employees on Jun. 29. CEO John Hanke explained that the company's expenses grew faster than its revenue. "In the wake of the revenue surge we saw during Covid, we grew our headcount and related expenses in order to pursue growth more aggressively, expanding existing game teams, our [augmented-reality] platform work, new game projects and roles that support our products and our employees," he wrote. "Post Covid, our revenue returned to pre-Covid levels and new projects in games and platform have not delivered revenues commensurate with those investments."
The CEO also mentioned the company closed its Los Angeles studio, laying off its game platform team and making further cuts across Niantic. "As a result, we will be sunsetting 'NBA All-World' and stopping production on 'Marvel: World of Heroes,'" he wrote. "This means we are laying off around 230 Niantics."
Amazon:
(Image Credit: Amazon)
Back in March, CEO Andy Jassy confirmed That Amazon would see 9,000 job cuts in addition to the 18,000 announced in January. That number was originally set at 10,000 job cuts –-- affecting the company's device and services business in November. "Between the reductions we made in November and the ones we're sharing today, we plan to eliminate just over 18,000 roles," Amazon CEO Andy Jassy wrote on Jan. 4. "Several teams are impacted; however, the majority of role eliminations are in our Amazon Stores and PXT [People Experience and Technology Solutions] organizations."
In January, over 3,000 workers in California, New York, and Washington received notifications regarding their job loss as part of Amazon's 2nd big wave of layoffs. The company filed notices on WARN related to the job cuts in those three states. They revealed that 2,320 workers in Seattle and Washington lost their jobs on Mar. 19, and 504 workers in California lost their jobs on that same day. Meanwhile, 299 employees were laid off on Apr. 18 in New York City.
Although Amazon's filings didn't show which roles would be eliminated, the California-based one disclosed that program managers, software engineers, research scientists, applied scientists, recruiters, and more would lose their jobs.
"Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so," Jassy added. "These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I'm also optimistic that we'll be inventive, resourceful, and scrappy in this time when we're not hiring expansively and [are] eliminating some roles."
Epic Games:
On Sept. 28, Epic Games announced plans to lay off 870 workers (16% of its workforce). "For a while now, we've been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators," Epic Games CEO Tim Sweeney wrote. "I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic."
Sweeney also said Epic Games focused on "making ongoing efforts to reduce costs, including moving to net zero hiring and cutting operating spend on things like marketing and events." However, the company still fell short of financial sustainability, and the layoffs are the best way to address that issue. He says these layoffs help stabilize finances.
"We’re cutting costs without breaking development or our core lines of businesses so we can continue to focus on our ambitious plans,” Sweeney wrote. “About two-thirds of the layoffs were in teams outside of core development. Some of our products and initiatives will land on schedule, and some may not ship when planned because they are under-resourced for the time being. We’re ok with the schedule tradeoff if it means holding on to our ability to achieve our goals, get to the other side of profitability and become a leading metaverse company.”
Epic Games also said it will hire workers for critical roles “while maintaining net zero at our new site.”
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