Read/Delete: The Winter Wave of Tech Layoffs Continues
Many tech stocks have been in a tailspin for the better parts of the last 12 months, which was one factor in the reduction of the workforces of numerous companies and startups in the tech sector after the pandemic years of growth. Even tech bulwarks like Amazon, Meta and Twitter carried out mass layoffs, with Jeff Bezos’ company topping the global ranking for corporations with the most laid-off employees with 18,000 layoffs. On January 19, Microsoft announced it would reduce its workforce by about ten thousand. A day later, Google parent Alphabet announced it would cut 12,000 jobs. As our chart shows, the winter months have been especially layoff-heavy at tech companies and startups.
In November 2022 alone, more than 50,000 tech workers were laid off globally. Meta fired 11,000 employees, Amazon let 10,000 workers go, and Salesforce laid off another 1,000 after previous waves of layoffs. Crypto companies were among the hardest hit in the fintech sector. Even though only 63 companies reduced their workforce, industry heavyweights Crypto.com, Coinbase and Kraken alone fired a combined total of more than 5,000 employees, likely due in part to market volatility and the drastic drop in the price of popular tokens such as Bitcoin, dubbed the “crypto winter.”
Since the beginning of the year, more than 120,000 employees have been laid off at tech-related companies, which is around 75 percent of the tech and startup workforce let go in all of 2022. Most recently, companies such as Dell, PayPal, IBM, Yahoo and Zoom parted ways with 1,300 to 6,500 employees each. In total, about 283,000 people were laid off between January 1, 2022, and March 2, 2023, about 68 percent of them in the United States.
Also partly responsible for the unprecedented wave of layoffs are Russia’s war of aggression against Ukraine and increased plant closures in China due to the People’s Republic’s zero-covid strategy, which has significantly exacerbated the global economic situation. In addition to external factors, these layoffs can also be attributed to miscalculations from previous years. Meta, for example, increased its workforce by 60 percent between 2019 and 2021, from nearly 45,000 to 72,000 employees. The only GAMAM member skirting major layoff rounds is Apple, allegedly in part due to CEO Tim Cook taking a pay cut of $50 million, 40 percent of his total income generated from the company.
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ABOUT MIKE MERCURIO
Michael N. Mercurio is a leading attorney in the field of mergers and acquisitions (M&A). He serves as outside general counsel in buy-side and sell-side M&A, as well as in all business law and real estate law matters. As a strategic partner to firm clients, Mr. Mercurio regularly counsels entrepreneurial individuals and assorted entities on the many challenges, issues, and opportunities companies face throughout the business lifecycle—from start-up to eventual exit.