The layoffs in the tech sector continue to go on. This includes companies such as Google, Amazon, and iRobot. These companies are known for their products and innovations. They also have a presence in the Fintech industry and the Telecoms sector.
Amazon layoffs are the biggest in the company’s 28-year history. They are aimed at trimming expenses in an uncertain global economy. The company says it will offer a severance package to affected workers. But it needs to be clarified how many additional roles will be cut.
The layoffs are part of Amazon’s annual operating planning review, which extends into the new year. While the company has previously said it will cut about 10,000 jobs, the exact number has yet to be determined.
Layoffs result from a slowing economy, inflation, and higher wannoce interest rates. These factors have caused a decrease in consumer demand. In turn, the tech industry has been impacted. As a result, some of the biggest companies, including Google, Salesforce, and Microsoft, have been forced to cut staff in recent weeks.
Andy Jassy, Amazon’s CEO, has announced its intention to trim its workforce. He wrote a memo on Thursday that details Amazon’s layoffs.
Although Amazon hasn’t said precisely how many of the 18,000 roles to cut will be eliminated, most of the cuts will likely be in the company’s People, Experience, and Technology (PXT) division. This includes its retail, devices, and books divisions.
Amazon has offered voluntary severance packages to employees since Tuesday. However, no details are available about how much those packages will cost. Those impacted will be notified in the new year.
Microsoft is one of the companies that have announced plans to lay off workers. This is the second round of layoffs this year. Some employees affected by the layoffs include those involved with the Modern Life Experiences (MLX) group.
The MLX group was created in 2018 to win back consumers. However, the company has yet to confirm how many employees are leaving.
While Microsoft has been cutting workers in the last few months, the amount they are leaving is relatively tiny. Of the 180,000+ employees at Microsoft, only about 1% will be affected.
Microsoft’s operating cost growth for the first quarter of fiscal 2023 was less than the company had anticipated. The company’s actual costs were $13.2 billion. This is a reduction from the previous guidance of $13 billion. However, the company also expects a slowdown in cost growth for the fiscal year.
Microsoft’s forward P/E multiple, which measures how much a company’s stock is expected to pay for each dollar of earnings, has been near three-year lows. Despite this, the company’s CEO Satya Nadella has said he is optimistic about the future. He believes the industry is positioned to overgrow with the addition of AI.
The world of technology is undergoing a big reset in 2023. This year, many tech companies have implemented layoffs, including Amazon, Microsoft, and Salesforce. As a result, these firms have been forced to cut costs in addition to hiring freezes. But analysts expect more job cuts to hit the tech industry in the coming years.
Alphabet, Google’s parent company, is now feeling the pressure. It plans to cut 10,000 “poor performing” employees and retool its performance review system. That’s a lot of people to fire, and many Google employees have already expressed concerns about the new development.
Google’s new performance review system, GRAD, will make it easier for management to identify and remove low-performing employees. However, it also makes it more challenging for top-performing employees to get high marks.
Many Google employees have complained about the new development, but the company has not confirmed that layoffs are possible. The company’s authorities have promised transparency.
In a letter to Alphabet, hedge fund billionaire Christopher Hohn argues that the cost of Google employees has increased too much. He has urged the company to reduce per-employee costs and hold off on large bonuses.
Alphabet’s plan for the next two years looks grim. According to the company’s executive team, they will begin cutting expenses in the first half of 2023.
In its second-quarter earnings results, iRobot announced a restructuring of operations. The company is now aiming to cut its workforce by 10%. It expects to create $30 million in savings by the end of 2023.
During the third quarter, iRobot recorded a $5 million restructuring charge. In addition, the company plans to record further restructuring charges for facility consolidation in the fourth quarter. Combined with its existing credit agreement, the restructuring costs are expected to total $20-$30 million.
According to Robot, the restructured operations will be designed to align cost structure with near-term revenue. As a result, the company expects to generate $10 million in cost savings in the fourth quarter of 2022 and $30 million in savings in 2023.
The firm is also preparing to reduce its global facility footprint. iRobot’s XNXX 270K SF global headquarters is located in Bedford, Massachusetts.
The company has 15.7 million customers worldwide. iRobot is the leading developer of cleaning robots. These products include the Roomba vacuum. But the firm is now facing a downturn in its sales. This is attributed mainly to the recession and the war in Ukraine.
iRobot is also losing money. It’s currently losing about $156 million operating losses for the first three quarters of 2022.
Telecoms company Ericsson
Ericsson AB is the world’s largest network solutions provider. It supplies software and services for traditional telecommunications operators, including cable television and broadband networks. It has a 40% share of the global mobile networking gear market. But it’s facing a challenging worldwide economic environment and mounting competition from China’s Huawei and Finland’s Nokia.
Ericsson has laid off approximately 400 employees in Russia. In addition, the company suspended deliveries to Russian customers in April and continues to wind down its operations in the country.
According to Svenska Dagbladet, an unidentified source at Ericsson said, the company plans to cut its workforce by up to 25,000 employees. Most of the cuts will come from its research and development division. However, other operations would be affected, too.
Ericsson is one of the top wireless networking companies in the world. Still, it has been struggling in a sluggish market. It posted a 26 percent drop in net profit in the second quarter. Sales declined by 11 percent year on year. And it lost more money on its digital services business than expected.
Ericsson slashed costs in the fourth quarter. That cost cut was part of a larger restructuring plan to restructure the company and create a more sustainable profit model. Ericsson aims to achieve a run rate of at least 10 billion crowns yearly in cost reductions.
Fintech company Klarna
While the rest of the economy continues to struggle, the tech industry is shedding staff at alarming rates. Companies like ,Klarna, iRobot, and Amazon have announced layoffs.
According to Techcrunch, Klarna is laying off 10% of its workforce. The Swedish buy-now-pay-later (BNPL) giant announced the cuts in a prerecorded video call with its employees.
Klarna, which has offices in Stockholm and Short North, is a financial technology company used by retailers to break down payments into installments. It also breaks down transaction volumes.
Aside from the fact that the buy-now-pay-later model has been a victim of the global recession, the company has also been hit by rampant libertic inflation. That’s one reason why it decided to trim its headcount.
Another example is the cybersecurity firm Snyk, letting go of 14% of its global workforce. In addition, Snyk slashed its subscription services spending and reduced business travel.
Klarna has been in the process of restructuring its global workforce for the past few months. Last month, the firm let go of 750 employees. And now, it’s starting the second round of layoffs this year.
In an interview, Klarna CEO Sebastian Siemiatkowski said the company is undergoing a “restructuring” of its business operations. He also cited the war in Ukraine as a factor that’s contributing to the tough times.
TikTok, the wildly popular video platform, is restructuring its U.S. operations, as well as its Europe operation. In an interview with Wired, an anonymous former employee says the company’s plan is partly due to an overall economic downturn.
The move comes during widespread tech layoffs, which have been ramping up in recent months. Companies, including Twitter, Amazon, and Zillow, plan to reduce their workforces. In addition, several Silicon Valley companies, including Facebook, are laying off thousands of employees.
TikTok may seek to provide additional oversight of user data through Stateside hires. While it’s unclear how many positions are being cut, more than 4,000 global positions are open at the site, according to a recent job posting.
More than half of the company’s workforce is based in the U.S., except for its Chinese parent company, ByteDance. However, the layoffs will continue into 2023.
One of the most notable changes is that TikTok will double its Creator Fund to more than $1 billion over the next three years. That fund has already reached $200 million. And in addition to that, the company is committed to hiring nearly 1,000 engineers in its Mountain View, California office.