Layoffs: Will the Winter Be Harsh for Employees of Tech Companies, Start-ups?
Moneylife Digital Team 19 November 2022
As warned by several experts and economists, winter seems set to be harsh on employees of tech companies, online businesses and marketplaces. Fearing an economic recession, most tech companies, who hired innumerable employees at insane salaries only a few months ago, are now laying them off faster. 
 
Even as layoffs in the tech sector had begun, Elon Musk ratcheted up the tempo by firing nearly 50% of the Twitter workforce soon after he acquired the company. Twitter's 7,600-strong workforce is halved and several departments across the globe have been shut down completely, including in India. 
 
Mr Musk has now slashed the food bill by asking employees of a company, that famously offered wine on tap, to get their own eats. This, and a series of layoffs that followed, is bringing home the harsh reality of the global economic situation for those who were hitherto the most privileged group of employees in the world and who had been unaffected even by the COVID-19 pandemic. 
 
Amazon is the latest technology company to lay off workers that, it recently said, it was fighting to retain. Citing 'a particularly competitive labour market', it had more than doubled the cap on cash compensation for its tech workers. Meta, Twitter, Salesforce, Lyft, Stripe, Uber and tech giants like Microsoft and Google have laid off employees amid global macroeconomic conditions and recession fears. Some of them have also put a total freeze on new hirings.
 
Amazon To Lay Off 10,000 Employees
 
Amazon plans to lay off around 10,000 people in corporate and technology jobs starting as soon as this week, a report from New York Times (NYT) says, quoting people with knowledge of the matter. This would be the most extensive job cut in the company's history.
 
 
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, the people, who spoke on condition of anonymity because they were not authorised to speak publicly, told the newspaper.
 
According to the report, Amazon's planned retrenchment during the critical holiday shopping season—when the company typically has valued stability—shows how quickly the souring global economy has put pressure on it to trim businesses that have been overstaffed or underdelivering for years.
 
As thousands of techies lose jobs at big tech companies, most of them find it difficult to get jobs, as there is a freeze on new hires at nearly every top company.
 
Last week, Amazon announced to freeze new hiring in its corporate workforce, with the global economy 'in an uncertain place'. Beth Galetti, Amazon's senior-vice-president of people experience and technology, confirmed the move in a memo that the company had already begun pausing or slowing hiring in various corporate departments in recent weeks. "We are facing an unusual macro-economic environment, and want to balance our hiring and investments with being thoughtful about this economy," Ms Galetti wrote.
 
Meta Sacked 13% of Its Global Workforce
 
Last week, in one of the worst layoffs in the tech industry, Meta founder and chief executive officer (CEO) Mark Zuckerberg sacked more than 11,000 employees—about 13% of the global workforce. He says the company is also taking several additional steps to become leaner and more efficient by cutting discretionary spending and extending its hiring freeze through the first quarter (Q1).
 
Meta has planned to shut down its video-calling smart display 'Portal' and its two unreleased smartwatches projects, as the company eliminated 11,000 jobs.
 
The Meta executives announced at an internet meeting that the company has planned to kill both, Portal and the wearables, reports The Verge.
 
The tech giant has also dropped its plans to offer Portal video calling hardware to other businesses, as well as the other two smartwatches that were in the early and intermediate stages of development.
 
Musk's Takeover Hit Nearly 50% Employees at Twitter 
 
Earlier this month, Mr Musk took over as the Twitter boss and immediately fired Indian-origin CEO Parag Agrawal, chief financial officer (CFO) Ned Segal, and the company's policy chief Vijaya Gadde, among others.
 
The company's chief marketing officer Leslie Berland also left, along with other senior people amid growing uncertainty.
 
However, within a few days, Twitter reportedly asked some employees to come back and help the remaining folks put the tumbled house in order. 
 
 
Salesforce Laysoff Hundreds of Employees
 
Enterprise software company Salesforce has laid off hundreds of employees as big tech companies navigate an economic slowdown. "Our sales performance process drives accountability. Unfortunately, that can lead to some leaving the business, and we support them through their transition," the company says in a statement.
 
The company had 73,541 people on its payroll earlier this year. Salesforce previously laid off roughly 90 contract workers and implemented a hiring freeze through January 2023.
 
Astra Fired 16% of Its Staff
 
Astra, a rocket start-up based in the US that went public last year, has fired 16% of its staff as part of a broader strategy to increase the shrinking financial runway and decrease expenses.
 
Lyft Laying Off 13% of Employees
 
Ride-hailing platform Lyft is laying off 13% of its workforce, or 683 employees, as it aims to cut operating expenses amid global macroeconomic conditions.
 
Opendoor Reduced Workforce by 18%
 
Prop-tech platform Opendoor has laid off nearly 550 employees, or 18% of its workforce, as the real estate technology company navigates through 'one of the most challenging real estate markets in 40 years'.
 
Unacademy Laid Off 350 Employees
 
Back home, education technology company Unacademy laid off 10% of its workforce or nearly 350 employees, as funding winter deepens for the Indian start-up ecosystem.
 
Brainly Says Good Bye to Several Employees
 
Online community learning platform Brainly, which has laid off several employees globally, including nearly all members from its India team, says that the company was not 'able to maintain some of the roles' focused on developing its paid plans and products. 
 
"Unfortunately, we were not able to maintain some of the roles focused on developing our paid plans and products. Before this information went public, we had offered departure packages to all 25 people whose roles were affected by these changes," the company spokesperson told IANS.
 
Attrition at Cognizant & Accenture due to Background Checks
 
While tech companies are worried about macroeconomic conditions and resorting to cutting their workforce, Indian units of Cognizant Technology Solutions and Accenture have seen attrition resulting from background checks of new employees.
 
According to a report from ETNow, Cognizant India has revealed that they had a 6% involuntary attrition in the quarter ended September. The company's India head Rajesh Nambiar said there was high involuntary attrition due to failed background checks. This comes after Accenture's India unit sacked several employees after it found that they used fake experience letters to get a job. 
 
"As companies ramp up hiring and with a shortage of skills in the market in the past year-and-a-half, many job seekers tried to game the system by using fake resumes and experience letters. However, the number of such cheaters is now coming down as companies complete background checks, eventually showing such candidates the exit door," the report says.
 
Meanwhile, according to Monster Employment Index, India saw a 6% drop in hiring activity in October amid changing patterns in the startup ecosystem, funding winter and fears of an upcoming recession. 
 
However, amid the layoff season, Tata Consultancy Services (TCS) announced plans to create 1,200 new jobs in the US by the end of 2024.
Comments
barokhoka1956
3 weeks ago
Effect of Privatization. Wish the commoners to boycott these Techies.
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