After the initial wave of tech giants announcing job cuts for the year ahead, a new wave of firms has followed suit to cut spending amid the rising production costs and looming recession.
Salesforce is one of the first to announce its plans to cut jobs this year. On January 4, the company co-chief executive Marc Benioff said in his letter to employees that Salesforce would cut 8000 employees or 10% of its workforce.
However, it was only last week that some company employees discovered they were part of the job cuts. The Irish Independent reported that 200 of the 2100 employees were only informed of their layoffs last February 2, which still falls under the 10% target.
The company experienced a boom in revenue at the start of the pandemic, which led to the aggressive hiring of remote employees. “We hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Mr. Benioff explained.
Last Wednesday, Disney announced that it would cut roughly 7000 jobs or 3% of its workforce. A quarterly earnings call with investors also stated that it would slash $5.5 billion in costs.
The entertainment giant also announced it would reorganize into three sectors: Disney Entertainment, an ESPN division and a Parks, Experience and Products unit.
Despite this, Disney’s stocks went up 6% in premarket trading last Thursday.
Meanwhile, Zoom plans to cut an estimated 1,300 jobs or 15% of its workforce.
Company representatives said the demand for the company's conferencing video production services hasve slowed down due to the pandemic.
Chief Executive Officer Eric Yuan, in his message to employees, mentioned that he would take a pay cut of 98% for the coming fiscal year and forego his corporate bonus.
"We worked tirelessly... but we also made mistakes. We didn't take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably toward the highest priorities," Yuan wrote.
With the layoffs, Zoom will incur around $50 million to $68 million in charges. The company said a substantial part will be spent in the first quarter of fiscal 2024.
In a filing with SEC last Wednesday, eBay reported that it will lay off 500 workers globally, or 4% of its total employee base.
CEO Jamie Iannone said in a memo to employees that the cuts will allow the company to deliver better customer experience.
“This shift gives us additional space to invest and create new roles in high-potential areas — new technologies, customer innovations and key markets — and to continue to adapt and flex with the changing macro, e-Commerce and technology landscape,” Iannone explained. eBay will send out emails to laid off employees in the coming days.
Despite this, shares of the e-Commerce giant rose by 1% in extended trading.
Declining PC sales have also prompted Dell to cut roughly 6650 jobs or 5% of its workforce, affecting workers from the engineering, product and sales departments the most. Once in effect, Dell’s headcount will be the lowest since 2017.
The layoffs were announced last Monday in a memo by Dell Technologies Co-Chief Operating Officer Jeff Clarke. He said that despite hitting a pause with hiring, reducing travel and eliminating expenses, the company must make reparations for its losses.
“The steps we’ve taken to stay ahead of downturn impacts, which enabled several strong quarters in a row, are no longer enough... We now have to make additional decisions to prepare for the road ahead,” he explained.
Yahoo! is the last of the firms to hop on the layoff craze, announcing last Friday that the company will cut 1600 jobs throughout the year, with 1,000 happening at the end of this week.
“Given the new focus of the new Yahoo Advertising group, we will reduce the workforce of the former Yahoo for Business division by nearly 50% by the end of 2023,” a spokesperson from Yahoo told CNBC.
The company is instead shifting its efforts to its long-standing partnership with the digital advertising company Taboola.
“These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run while enabling Yahoo to deliver better value to our customers and partners,” the spokesperson added.
In the past month alone, more than 60,000 jobs have been cut across major tech companies, with most coming from hires made at the start of the pandemic. And as the shift towards artificial intelligence intensifies among the giants by the day, layoffs across all sectors can only be imminent.