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Have you watched the news lately? It’s filled with stories about Silicon Valley going through a massive layoff period with tech giants like IBM and Cisco announcing thousands of job cuts. Is it a sign of a looming recession or is it just a strategic move to stay ahead of the game? Whatever the reason may be, one thing is for sure – the tech world is in for a shakeup.
Stay with us as we delve deep into the situation at hand, trying to make sense of why these tech companies are suddenly trimming down their workforce. So grab a cup of coffee, we’re about to take you on an informative journey.
If you are working in Silicon Valley right now, you have our sympathy. Layoffs have been rampant in the tech industry, with over 385,000 people losing their jobs in 2022-2023. And unfortunately, things don’t seem to be getting any better. Big-name tech companies like PayPal, Spotify, Google, and Microsoft have all announced layoffs, with a total of 170,967 U.S. workers affected in 2023. It’s a scary time for those in the tech industry, and it’s hard to know where the job market will go from here. We have our fingers double-crossed, hoping things turn around soon.
So, who knows what is R-E-A-L-L-Y going on and why are there so many being laid off? Some people think that the bigwigs running these companies are to blame, while others think it’s just the natural ebb and flow of the global economy itself. Regardless of who’s at fault, the net outcome is there are some seriously talented techies in hunt of their next job, right now. Making it an ideal time to swoop in and snag some top-notch talent.
A mass layoff occurs when a company pulls the plug on a portion of its workforce. To be considered “mass”, it must leave at least 50 employees without a job in less than 30 days. But the term is also used when a whopping 500 employees are let go on the very same day or time frame. If you are interested in tracking tech companies’ layoffs in real-time, there are numerous directories to help, including:
2022 was a wild ride for tech companies and their employees. Big names like Peloton, Robinhood, Substack, Lyft, and others made headlines for laying off workers at the start of the year, but it wasn’t until Twitter dropped a bomb in November that things got real. Their massive layoff of 50% of employees shocked everyone, creating a chain reaction. Soon enough, Meta, Amazon, and Cisco announced their own cuts.
In 2023, tech layoffs seem to be the continuing theme of the year. A whopping 714 tech companies have already resorted to layoffs, which imcapted abount 2,419 employees every single day.
Location: Menlo Park, CA
It looks like Meta decided to clean house. They laid off a whopping 11,000 employees back in November of 2022. Although many thought they were done, media reports in March 2023 announced another round of major layoffs, booting out another 10,000 unfortunate souls. Looks like middle management were the first to go. Now, a hiring freeze is in place, and 5,000 open roles remain unfilled.
“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.”
Location: Mountain View, CA
Alphabet, Google’s parent company, gave the phrase “downsizing” an entirely new meaning when it announced plans to cut a whopping 12,000 Google employees, which is about 6 percent of the company’s workforce. It seems that even the giant tech companies are not immune to the economic turmoil brought about by the pandemic. According to Alphabet’s chief executive, Sundar Pichai, the company wants to refocus its efforts on products and technology that are core to its future, like artificial intelligence.
“We hired for a different economic reality than the one we face today.”
Location: San Francisco, CA
It looks like Salesforce might be tightening its belt again. According to a report by Bloomberg, there may be more tech layoffs in store for the CRM powerhouse. Brian Millham, the company’s chief operating officer, hinted that the axe might fall again in the tech industry. Yikes. If this happens, it’ll be a double whammy for employees who are still adjusting to the 10% job cut they experienced back in January.
“The structure of the organization — if we feel like it needs to change and reshape — we’re going to make those moves to drive the efficiencies.”
Perhaps some of their ex-employees will follow similar practices as Salesforce’s co-CEO Marc Benioff, to find their next job. He is a known fan of meditation, and often works with gurus and shamans in India and Hawaii to stay open-minded when making decisions.
Elon Musk is on a firing spree. His latest victim? Over 200 employees, including some big names like Esther Crawford, Haraldur Thorleifsson, and Leah Culver are among the most notable layoffs. Word on the street is that ever since Musk took over Twitter last October, the company’s staff count has plummeted by a massive 70%.
"At the end of the day businesses are not families - they’re teams. The company’s needs can change or new directions can emerge. If you’re delivering with excellence then you can feel good, no matter what happens or when your time is up."
Looks like the man is not playing around when it comes to targeted restructuring to reshape the company to significantly reduce expenses. The only question is, “Who’s next?”
Location: San Jose, CA
PayPal is doing some spring cleaning and unfortunately, 2,000 employees are getting the boot. CEO Dan Schulman says in blog post that the company has been working hard to stay afloat in the “challenging macroeconomic environment” but it’s time to tighten up the purse strings.
“We’re navigating that environment as best we can, and we’ve taken into consideration that range of outcomes on volume growth and on revenue growth as it relates to what we think we can deliver from an operating margin and EPS standpoint.”
Location: Sunnyvale, CA
The company just announced tech layoffs in February, affecting up to 1,000 employees in the first quarter (12% of their global workforce.) Another 8% (600 people) have been told to pack up and leave in six short months. And if you work in one of Yahoo’s ad business units, you are out of luck, as half of those jobs have been eliminated.
Despite the cringe-worthy news, Yahoo CEO Jim Lanzone insists that everything’s gravy. According to him, these layoffs are part of a business strategy, not because the economy has gone down the tubes. Which might be true as Yahoo will still be raking in about $8 billion this year.
“Despite many years of effort and investment, [the strategy of our ads business] was not profitable and struggled to live up to our high standards across the entire stack.”
Twilio just went on a firing spree, handing out pink slips to 1,500 employees (ouch!). This comes hot on the heels of the company’s restructuring plan in September, which saw 11% of the workforce waving goodbye. For those of you keeping score, that’s a dizzying 17% of Twilio’s total workforce. Apparently, Twilio CEO Jeff Lawson felt that some serious reorganization was necessary to keep Twilio competitive in the long run.
“These changes hurt. The weeks ahead will be about processing all this change and working together to acclimate to our new structure.”
LinkedIn has joined the downsizing season by laying off more than 960 employees worldwide and closing its InCareer app, which was aimed at users in China.
Zoom’s pandemic success story took a turn when they announced they’re cutting 1,300 jobs – that’s 15% of the staff that the company employed when they were on the rise. The online conferencing platform had beefed up its team to meet a crazy surge in demand when the pandemic first hit. But now that things have stabilized, Zoom is streamlining its operation.
The streamlining doesn’t mean they’re doing poorly though! Media reported that in November, Zoom raked in a respectable .1 billion in revenue, with $614.3 million of that coming from enterprise accounts. And let’s not forget they also had $272.6 million in free cash flow. So while Zoom might be leaner, it seems they’re still doing quite well.
CEO Eric Yuan wrote in a blog post addressed to “Zoomies” that he owns the full responsibility for these layoffs and says he will cut his salary by 98% and decline his bonus. Also, the executive leadership will reduce their pay by 20% and also forfeit their bonuses.
“As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today — and I want to show accountability not just in words but in my own actions.”
It’s amazing how quickly things change, just 5 months earlier, Yuan shared his 5-year vision for the future of Zoom with Standford Graduate School of Business in this clip…clearly nobody was thinking about layoffs back then:
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Not every tech company in Silicon Valley supports layoffs. The brightest example of this is over in Cupertino.
Apple has figured out how to weather the storm without having to sound the abandon ship alarm and cut jobs. Unlike some other tech companies, Apple has managed to navigate through the economic challenges without resorting to drastic measures using tactics like shrinking bonus sizes for employees. And while others in the industry were recruiting like crazy from 2020 to 2022, Apple only increased their headcount by 20%.
How did Apple do that? It seems with some good old fashion staff management that offers job security. While other tech giants like Amazon and Alphabet went on a hiring spree, which are now crashing down, resulting in droves of employees being laid off, Apple was being careful with their staff growth to avoid letting anyone go if times got tough.
The startup scene ain’t exactly booming right now. Venture funding is scarce, leaving many companies struggling to secure cash. (Except for the lucky ducks at OpenAI – apparently, they don’t even know what a layoff is.) But don’t worry, things aren’t all doom and gloom.
Chat software is the new cool kid on the tech block. The impressive ChatGPT by San Francisco’s OpenAI is leading the way, and rumor has it that a whole gang of startups will soon follow suit. Venturing capitalist Shawn Carolan has big dreams for chatbots that can answer everything from consumer queries to workplace questions. Carola, A partner at Menlo Ventures, is predicting a surge in startups ready to take over the chat game.
Also, rumor has it that investment will start to pick up once valuations come back down to earth. This, thankfully, seems to be happening – as some unicorns are already adjusting their valuations to match the new normal.
No one would consider Russia’s invasion of Ukraine as great news – except maybe for those looking for tech job opportunities in the defense sector. ZipRecruiter’s chief economist Julia Pollak, has confirmed that US companies are scrambling to supply weapons and equipment to Ukraine and its neighbors, piquing the interest of job seekers with a knack for technology.
“If you’re getting laid off from Facebook or Google you might consider going to Lockheed Martin.”
The aerospace giant, well-known for its rocket systems heavily used by the Ukrainian forces, is on the hunt for more than 200 tech experts, based primarily in Sunnyvale or with the option to work there.
Working with the right offshoring firm will turn the tech sector’s massive layoffs into an opportunity for you!
The industry is nothing if not resilient. Despite the challenges, the trend is that tech giants still surging forward and and reaching new heights. We may be down, but we’re definitely not out. And who knows, maybe these setbacks will fuel the next big breakthrough. Time will tell, but if there’s one thing we know for sure, it’s that tech will always be at the forefront of innovation.
Let’s face it, layoffs happen. And while it may not be the most pleasant experience for those directly affected, it does provide a unique opportunity for companies to expand their reach and pick up some of the laid-off talent in cheaper locations. Eastern Europe and Latin America are ripe with skilled developers who can offer the same level of talent and expertise at a fraction of the cost. So, why not cast the net further and tap into the global talent pool? Not only will it save you a pretty penny, but it also allows for diverse perspectives and ideas to be brought to the table. And hey, who doesn’t love a little international flair?
In the unpredictable world of startups, even job cuts come with a silver lining. Yep, you heard that right – layoffs provide an opportunity for startups to up their game. With Yourshoring, tech companies can now collaborate with skilled workers from offshoring countries all around the globe, saving costs on staff and reducing the burden of social benefits.
Reasons why offshoring is beneficial for Silicon Valley startups:
Going offshore with a partner like turnkey allows for easier scalability, giving you flexibility and the infrastructure to create new technologies and add new team members as needed.
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