Elon Musk’s Twitter may have attracted a lot of criticism after the microblogging platform decided to hand over pink slips to its staff, but it’s not the only firm to have taken such a step
It has been a tough time for tech giants across the world, mainly due to the economic slowdown and recession fears. While Google, Amazon, and a few other companies froze hiring, the worst was yet to come for thousands of employees as Netflix, Microsoft, Snap, among others started downsizing their workforce.
Elon Musk’s Twitter may have attracted a lot of criticism after the microblogging platform decided to hand over pink slips to its staff, but it’s not the only firm to have taken such a step.
As per reports, Mark Zuckerberg-led Meta Platforms is set to lay off 'thousands' of employees this week. Meta Platforms is likely to lay off 12,000 employees or 15% of its staff as falling ad spends pose serious problems for the Big Tech firm.
The Facebook parent’s decision follows similar moves by other tech majors such as Apple, Microsoft, and Google. These firms have frozen hiring or begun handing out pink slips to their staff to rationalise costs and maintain operating margins.
Twitter last week sacked almost 50 per cent of its global workforce, including nearly 90 per cent of employees in India.
Interestingly, the company later had to ask some of the fired employees to return after it realised that they were either fired in error or were too essential to certain operations.
When Zuckerberg Hinted At Layoffs
Last month, Meta announced a pause in hiring and a subsequent restructuring as recession fears loomed large across the globe.
“I had hoped the economy would have more clearly stabilised by now, but from what we're seeing it doesn't yet seem like it has, so we want to plan somewhat conservatively," Zuckerberg told employees during the Q&A session last month.
In June, Meta said it planned to cut its hiring of engineers by at least 30% this year, following which they implemented a hiring freeze in September. Zuckerberg has warned of further downsizing in the near future.
He also said, “there are probably a bunch of people at the company who shouldn’t be here.” Regarding the headcount changes, he added that budget cuts would happen across teams and that individual teams would have to figure out their own ways to handle their downsizing.
The Facebook and Instagram parent company reported over 87,000 employees at the end of September, but these “large-scale” layoffs are expected to slash a significant portion of staff members.
A week ago, Meta forecast a weak holiday quarter and significantly more costs next year, sending shares down nearly 20 per cent as investors voiced skepticism about the company's pricey metaverse bets.
According to Reuters, this disappointing outlook for the company comes as it grapples with slowing global economic growth, intense competition from TikTok, privacy changes from Apple, increased regulatory pressure and concerns about the massive spending on the metaverse.
From Microsoft To Amazon, It’s Hiring Freeze And Pink Slips
Microsoft laid off around 1000 employees last month, in what was the third round of downsizing at the company this year. Netflix sacked nearly 500 employees this year. In August, Snapchat sacked over 1000 people, The layoffs were announced as Snap’s stock price has fallen over 80 per cent in the last year. The company’s CEO Evan Spiegel said in an internal memo that the job cuts are necessary to “ensure Snap’s long-term success in any environment.” Meanwhile, Amazon is also planning to reduce its workforce.
In the earnings report, Amazon CFO, Brian Olsavsky said that the company had reduced headcount by almost 27,000. But the company has denied firing people.
"On the head count, yes, I think there was more. As we mentioned in Q1 we added 14,000 workers. Prior last year, we had reduced our net head count by 27,000. So, we were pretty transparent about the fact that we had hired a lot of people in Q1 for the coverage of the Omicron variant. Luckily, that variant subsided, and we were left with a higher headcount position. That has come down through adjusting our hiring levels and normal attrition and was pretty much resolved by the end of April or early part of May. So that is dominating the quarter-over-quarter reduction in head count," Olsavkya said.
Why Are Tech Giants Struggling?
The business saw a boom for several tech companies during the pandemic but the celebrations were short-lived.
The main reason is the economic recession along with the stiff competition that has compelled companies to chalk out restructuring plans and even layoff staff.
This can be attributed to the fact that companies cut back on costs during times of slowdown in the economy which has resulted in layoffs.
Meta, in particular, has struggled with a privacy update from Apple, which costs it more than $10 billion in lost ad revenue. Google’s ad business is facing the same fate.