Google and Facebook parent Meta are some of the companies that have laid off employees in recent months.
Beata Zawrzel | Nurphoto | Getty Images
From the US to Europe and Asia, global tech giants from Microsoft and Google to Amazon, SAP and more have laid off thousands of employees since the beginning of the year.
And this despite the fact that most of these companies are profitable.
“The downsizing is the result of over-hiring during the pandemic and a slower growth outlook than originally forecast,” said a report by financial services firm Jefferies.
With interest rates and inflation remaining high, consumers are reining in spending amid uncertainty in the global economy.
As a result, “companies must reduce headcount to regain operational efficiencies with headcounts consistent with current demand trends,” Jefferies analysts said.
As interest rates have risen, capital has become more expensive and companies have begun to rein in their labor costs.
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“For start-ups in particular, the job boost has been fueled in part by cheap capital,” wrote a Bank of America Global Research report.
Here are some of the better-known global tech companies that have laid off employees despite making big bucks.
Microsoft
Microsoft reported net income of $16.4 billion for the quarter ended December 31, down 8% year over year. The cloud business drove results, with Microsoft cloud revenue reaching $27.1 billion, up 22% year over year.
The company also delivered “record results” in fiscal 2022, which ended June 30. despite a “dynamic environment,” CEO Satya Nadella said in the tech giant’s annual report.
“We reported revenue of $198 billion and operating income of $83 billion. And the Microsoft cloud surpassed $100 billion in annual revenue for the first time,” he said in the fiscal 2022 report.
Despite this, Microsoft announced in January that it would lay off 10,000 employees as the company prepares for slower revenue growth.
Alphabet, parent company of Google
Google parent alphabet announced in January that it would cut 12,000 jobs.
The company missed earnings and revenue in the fourth quarter but managed to post 1% year-over-year revenue growth in the December quarter.
CFO Ruth Porat said during the earnings call that Alphabet hired 3,455 people during the quarter, most of them in technical roles.
She also told CNBC’s Deirdre Bosa that the company is significantly slowing the pace of hiring to deliver long-term profitable growth.
“In the last two years we have experienced periods of dramatic growth. To accommodate and drive that growth, we hired for a different economic reality than today,” CEO Sundar Pichai said in a memo to employees.
Amazon
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Germany’s SAP said it broadly met its full-year 2022 guidance, with cloud revenue up 24% year over year. The enterprise software company also returned to positive operating profit growth of 2%.
However, SAP announced in January it would cut up to 3,000 jobs as leadership aims to position the company for double-digit earnings growth through 2023.
sea group
Singapore-based tech giant Sea Group reported net income of $422.8 million for the fourth quarter of 2022 — the company’s first quarterly profit since its inception in 2019.
Days later, the Indonesian unit of Sea’s e-commerce arm Shopee carried out a new round of layoffs, affecting fewer than 500 full-time and contract employees, according to media reports.
Over the past year, the company has reportedly already cut more than 7,000 jobs — or about 10% of its workforce.
Other technology companies in Asia have not been spared either.
Indonesia’s GoTo Group, Singapore’s sea groupCarousell, Foodpanda and South Korea’s Naver and cocoa are some of the companies that have laid off employees in recent months.
Dell
The downsizing was done to “stay ahead of the impact of the downturn,” co-COO Jeff Clarke said in a memo to employees.
While revenue improved in fiscal 2023, Dell’s operating income fell 26% to $1.18 billion in the fourth quarter of fiscal 2023 as global demand for PCs and laptops slowed.
Apple
Apple has so far avoided mass layoffs by hiring slower than Google, Amazon, Microsoft and Meta.
But the iPhone manufacturer is also tightening its belt.
The company reportedly delayed bonuses for some employees and restricted hiring in March. According to a Bloomberg report, Apple laid off contract employees in August.
The iPhone maker missed sales, earnings and revenue expectations for several divisions in the first quarter of fiscal 2023, which ended December 31 last year.
CEO Tim Cook blamed a strong dollar, production disruptions in China and macro headwinds.
This is not a complete list.
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