Peloton Interactive Inc announced plans to cut about 2,800 jobs globally in February, roughly 20% of its corporate roles, as part of a surprise shake-up that saw its CEO John Foley and several other top executives step down. — Reuters
Despite some promising economic signs recently, more tech companies are hitting the pause button on their hiring plans. They’re instituting freezes, rescinding jobs offers and even resorting to layoffs (with one CEO showing his remorse by sobbing on social media).
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According to Layoffs.fyi, a website tracking job cuts at startups and recently public companies, more than 37,000 positions were eliminated at 467 globally in the second quarter. That compares with fewer than 3,000 during the same time last year.
Here’s a look at the dozens of companies tapping the brakes.
Alphabet Inc, Google’s parent company, has been decelerating its recruiting efforts. Chief executive officer Sundar Pichai told employees in July that – although the business added 10,000 Googlers in the second quarter – it will be slowing the pace of hiring for the rest of the year and prioritising engineering and technical talent.
“Like all companies, we’re not immune to economic headwinds,” he said. The hiring pause is part of that slowdown, Google said, “to enable teams to prioritise their roles and hiring plans for the rest of the year.” It had nearly 164,000 employees at the end of March.
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Amazon.com Inc said in April that it was overstaffed after ramping up during the pandemic and needed to cut back. “As the variant subsided in the second half of the quarter and employees returned from leave, we quickly transitioned from being understaffed to being overstaffed, resulting in lower productivity,” chief financial officer Brian Olsavsky said at the time.
Amazon has been subleasing some warehouse space and paused development of facilities meant for office workers, saying it needed more time to figure out how much space employees will require for hybrid work. During its quarterly earnings call on July 28, the ecommerce giant said it’s been adding jobs at the slowest rate since 2019.
After relying on attrition to winnow its staff, Amazon has about 100,000 fewer employees than in the previous quarter. The company now has 1.52 million full- and part-time workers and is still the largest employer in the tech world, despite the reduction in headcount.
Apple Inc is planning to slow hiring and spending at some divisions next year to cope with a potential economic slump, according to people familiar with the matter. But it’s not a companywide policy, and the iPhone maker is still moving forward with an aggressive product-release schedule. Apple had 154,000 employees in September, when its last fiscal year ended.
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Calm, the meditation app, cut 20% of its 400 employees. The company, which was valued at US$2bil (RM8.91bil) in 2020, has been the No. 1 stress-reduction app for at least the last three years through May, according to Data.ai, a mobile analytics firm. The cuts were “especially difficult for a company like ours whose mission is focused on workplace mental health and wellness”, CEO David Ko said.
Carvana Co, an online used car retailer, laid off 2,500 people in May, about 12% of its workforce. In an unusual move, the executive team will forego salaries for the rest of the year to pay severance to those who were let go, according to a filing with the Securities and Exchange Commission. The company had more than 21,000 full-time and part-time employees at the end of last year.
Coinbase Global Inc, a cryptocurrency exchange, told employees it was cutting 18% of staff in June to prepare for an economic downturn. It also rescinded job offers. “We appear to be entering a recession after a 10+ year economic boom,” CEO Brian Armstrong said in a blog post. “While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment,” he said. The company ended the quarter with about 5,000 employees.
Compass Inc, a real estate brokerage platform, is eliminating 450 positions, about 10% of its staff, according to a filing. The company had nearly 5,000 employees at the end of 2021.
Gemini Trust Co, a cryptocurrency exchange founded by Bitcoin billionaires Cameron and Tyler Winklevoss, announced a 10% staff reduction in June. TechCrunch reported that the company laid off another 7% on July 18 and said a leaked plan showed it was seeking to cut a total of 15%, bringing it from 950 employees to 800 employees.
GoPuff, a grocery delivery app, is laying off 10% of its workforce and closing dozens of warehouses. The cuts will affect about 1,500 staff members-a mix of corporate and warehouse employees.
LinkedIn, which is owned by Microsoft, laid off its global events marketing team in August, as reported by Insider.
Lyft Inc told employees it was reining in hiring in May after its stock dropped precipitously. The company went further on July 20, announcing plans to shutter its car-rental business and cut about 60 jobs. Lyft had about 4,500 employees in 2021. Archrival Uber Technologies Inc, meanwhile, has been more upbeat. CEO Dara Khosrowshahi told Bloomberg in June that his company was “recession resistant” and had no plans for layoffs.
Meta Platforms Inc, the parent of Facebook, slashed plans to hire engineers by at least 30%. CEO Mark Zuckerberg told employees that he’s anticipating one of the worst downturns in recent history. The company had more than 77,800 employees at the end of March.
Microsoft Corp told workers in May that it was slowing down hiring in the Windows, Office and Teams groups as it braces for economic volatility. The company had 181,000 employees in 2021. More recently, the software maker cut some jobs – less than 1% of its total – as part of a reorganization. On July 20, the company said it began eliminating many job openings-a freeze that will last indefinitely. On Aug 9, the company laid off a group focused on consumer R&D called “Modern Life Experiences”.
Netflix Inc, the streaming giant, has had several rounds of highly publicised layoffs since it reported the loss of 200,000 subscribers in the first quarter. In April, it began scaling back some marketing initiatives, then cut 150 employees in May and 300 in June. Last quarter, it reported US$70mil (RM312.16mil) in expenses from severance and shed an additional 970,000 subscribers. Netflix had 11,300 employees in 2021.
Niantic Inc, maker of the Pokemon Go video game, fired 8% of its team in June. It was an effort to streamline operations and position the company to weather economic storms, CEO John Hanke told staff in an email. Niantic had around 800 employees at the end of last year.
OpenSea, an NFT marketplace, laid off 20% of its staff on July 14. CEO Devin Finzer tweeted, “We have entered an unprecedented combination of crypto winter and broad macroeconomic instability, and we need to prepare the company for the possibility of a prolonged downturn.”
Oracle, the database and cloud services company, is cutting workers in its US customer experience and marketing divisions. The company employs 133,000 people, according to its website.
Peloton Interactive Inc announced plans to cut about 2,800 jobs globally in February, roughly 20% of its corporate roles, as part of a surprise shake-up that saw its CEO John Foley and several other top executives step down. On Aug 12, the at-home fitness company announced its was eliminating an additional 800 jobs. The company reported having nearly 9,000 employees in 2021.
In a memo to employees provided to Bloomberg, CEO Barry McCarthy said, “We have to make our revenues stop shrinking and start growing again,” and added that the changes are essential to making Peloton cash-flow positive again. “Cash is oxygen. Oxygen is life,” he said.
Redfin Corp, another real estate brokerage, cut 8% of its staff in June. “We don’t have enough work for our agents and support staff,” CEO Glenn Kelman wrote in a blog post, saying that May demand was 17% below projections and that he expected the company to grow more slowly during a housing downturn. Redfin had about 6,500 employees at the end of last year.
Rivian Automotive Inc laid off 6% of its workforce on July 27, after warning of it in a July 11 memo where CEO RJ Scaringe said, “We will always be focused on growth; however, Rivian is not immune to the current economic circumstances and we need to make sure we can grow sustainably." The Southern California electric-vehicle maker has about 14,000 employees.
Robinhood, the online brokerage, has had two rounds of layoffs – cutting 9% of its workforce in April and another 23% in August, bringing the total number of employees dismissed this year to more than 1,000. CEO Vlad Tenev attributed the move to overstaffing in 2021 and said, “We have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody.”
The company had about 3,800 employees at the end of last year and racked up more than US$2 billion of losses since going public last July. It’s also shuttering offices in Tempe, Arizona, and Charlotte, North Carolina, according to the SF Business Times.
Salesforce Inc, the cloud computing platform, has been slowing hiring and reducing travel expenses, according to a leaked memo reported in May by Insider. It had nearly 78,000 employees as of the end of April.
Shutterfly, a maker of personalised photo items, laid off 100 staffers in June, CEO Hilary Schneider told Bloomberg. The company, which has 7,000 employees, is making hiring adjustments to weather the economic uncertainty. “Clearly we’re going through a period of economic choppiness on a global level,” she said. “When you look at the supply chain, it certainly is driving inflation and impacting consumer confidence.”
Shopify Inc, an ecommerce platform, is laying off 1,000 employees, 10% of its workforce, CEO Tobi Lutke said in a letter to employees on July 26. The affected jobs included recruiting, support and sales. The company is offering 16 weeks of severance, career coaching, a laptop and Internet allowance, home-office furniture and a free Shopify account for those who want to launch their own storefront. Shopify has 10,000 employees, according to its website.
SoundCloud, the music sharing website, is reducing its global workforce by 20% due to “the challenging economic climate and financial market headwinds,” CEO Michael Weissman said in an email to employees on Aug 3, seen by Billboard.
Spotify Technology SA, the audio service, is cutting employee growth by about 25% to adjust for macroeconomic factors, CEO Daniel Ek said in a note to staff in June. “I do believe only the paranoid survive,” he said on a conference call. “And we are preparing as if things could get worse, but it’s hard to be anything but optimistic given what I am currently seeing.” Spotify has more than 6,500 employees, according to its website.
Stitch Fix, an online personalised styling service, said in June that it was pursuing a 15% reduction in salaried positions – about 4% of its workforce – with the majority coming from non-technology corporate jobs and styling leadership roles. It’s coping with higher expenses and weaker demand. According to its website, the company has 8,900 employees.
Tesla Inc, the electric-vehicle maker, cut 200 autopilot workers as it closed a facility in San Mateo, California, in June. CEO Elon Musk said earlier that layoffs would be necessary in an increasingly shaky economic environment. In an interview with Bloomberg, he said that about 10% of salaried employees would lose their jobs over the next three months, though the overall headcount could be higher in a year. The company had 100,000 employees globally at the end of last year.
Tonal Systems Inc, the home fitness startup backed by sports celebrities Steph Curry and Serena Williams, laid off 35% of its 750 employees on July 13, according to CNBC.
Twitter Inc initiated a hiring freeze and began rescinding job offers in May, amid uncertainty surrounding Elon Musk’s acquisition of the company, according to an internal memo obtained by Bloomberg. More recently, it said it would be paring back office space, but without job cuts. The company had 7,500 employees in 2021.
Unity Software Inc, which makes a video-game engine, surprised employees in June when it sent pink slips to 200 of its 5,900 workers, amounting to 4% of its workforce. Its CEO had assured staff there would be no layoffs, according to Kotaku.
Vimeo, a video sharing platform, cut 6% of the company in July. CEO Anjali Sud said in a blog post that it had slowed hiring since the beginning of the year. “The reality is that the challenging economic conditions around us have impacted our business. We must assume that these conditions will remain challenged for the foreseeable future, and that we aren’t immune. So while we’ve intentionally taken action across other expense areas first, it’s become clear that we also have to look at our largest area of investment, our team,” Sud said.
Wayfair Inc, the online furniture retailer, initiated a 90-day hiring freeze in May. The company had 18,000 employees as of March.
Whoop Inc, a fitness wearable startup, laid off 15% on July 22 and now has about 550 employees, according to a company statement reported by the Boston Globe. – Bloomberg
