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Tech Winter is Here with Twitter massacre, Meta madness leading mass layoffs

Shaurya Thapa
Shaurya ThapaNov 10, 2022 | 15:17

Tech Winter is Here with Twitter massacre, Meta madness leading mass layoffs

Mass layoffs and job freezings are getting more and more common since this October (photo-DailyO)

First, it was Twitter with its mass layoffs (and rehiring some of the fired employees soon after). Then, yesterday, it was Facebook's parent company Meta with its biggest layoff to date, with 11,000 employees to have been fired.

But even apart from these two giants, mass firings have been the highlight of the whole October-November bracket this year, making this year's winter a particularly unfortunate season for the tech world. 

  • Other companies to have gone through such layoffs in the past few weeks include Amazon, Microsoft, Stripe, Apple, Spotify, Lyft and even Indian tech education companies like Unacademy and BYJU'S (which in other news had just roped in Lionel Messi as its global ambassador last Friday). 

Twitter fires 50% of its workforce and then rehires some two days later: Ever since Elon Musk's controversial rise to power as Twitter CEO and the sole member of its advisory board, Twitter has been going through some major changes.

  • The biggest news to shock Silicon Valley was obviously the mass layoff on November 4 including 3,700 employees (nearly 50% of Twitter's workforce) losing their jobs.
  • These layoffs were a part of Musk's new vision for Twitter and for cost-cutting measures. 

Plot twist: However, two days later, on November 7, insiders suggested that Twitter is now looking to rehire some of its employees as some of the firings were accidental and some of the fired employees would be required to fit in new job roles envisioned by Musk in his new Twitter. 

Meta estimated to fire 11,000 employees, biggest layoff for the company: As of November 9, mass layoffs were expected at Meta with CEO Mark Zuckerberg himself claiming in a board meeting that his "over-optimism" led to "overstaffing". 

(meme-Shaurya Thapa for DailyO) (1)
(meme-Shaurya Thapa for DailyO) (1)
  • As per a Meta spokesperson, the future of the company would focus on 'investments on a small number of high-priority growth areas'.
  • With the exact number of fired employees yet to be confirmed, this would be Meta's biggest layoff phase to this date. 

Microsoft laid off nearly 1,000 employees in October: In the yearly quarter than ended on September 30, Microsoft reported its slowest revenue growth in more than five years.

  • Naturally, tech-analysts began predicting a mass firing which turned out to be a hush-hush affair for the company as it let go of only 1% of its employees (a figure nearing 1,000 employees).

"Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly," a Microsoft spokesperson was quoted by media outlets.

Stripe fired 14% of workers in November: Irish-American online payments giant Stripe is one of the latest companies to fire its employees; an estimated 14% of its workforce.

  • The announcement came on November 3 with Stripe CEO Patrick Collins sending a detailed e-mail to his employees citing various reasons for this decision such as higher interest rates, inflation, and limited startup funding along with his own board's fault of overhiring.

To quote Collins's e-mail, "We, the founders, made this decision. We overhired for the world we’re in, and it pains us to be unable to deliver the experience that we hoped that those impacted would have at Stripe.”

BYJU'S axes jobs of 2,500 people even though its valuation has increased: October has been a profitable month for edutech giant BYJU'S with its valuation standing at $22 billion in October (having raised $250 million from existing investors in that month's funding round).

  • Announcing Lionel Messi as its global ambassador proved to be another measure to increase its international standing. 

At the same time, over 2,500 BYJU'S employees had to quit their jobs chiefly because of job redundancy or duplication of their job roles.

  • With that being said, the company aims to reorganise itself by hiring 10,000 people new employees all over the world (50% of the workforce being in India). 

Amazon and Apple rely on corporate freezings for now: Amid much rumour, Amazon and Apple haven't relied on any mass firings (yet) but both companies have announced a freeze in new jobs.

  • According to New York Times, Amazon sent this announcement as an email to recruiters, asking them to halt hiring for all corporate roles in stores businesses (covering physical and online retail operations as well as logistics work).
  • Sources suggest that more than 10,000 openings were available in this division before the announcement.

The reasons behind the freeze are uncertain. 

Apple has been transparent in announcing that this holiday season would bring low growth levels for the company. The production of iPhone 14 Pro and Pro Max has also been severely affected due to China's zero Covid policy, adding to Apple's economic troubles.

  • As of November 3, Apple has resorted to freezing jobs outside of research and development.
  • The employees working on new devices and future long-term projects are still safe but the pause might affect some hardware and software engineering positions in the future. 

Lyft fires 13% of its staff, 700 jobs cut: November 3 proved to be a dark day for most of the Silicon Valley companies as even taxi service Lyft fired 13% of its workforce that day (700 employees).

  • Apart from rising insurance costs in the rideshare sector, Lyft CEO Logan Green and President John Zimmer also mentioned in a letter to their employees about “a probable recession sometime in the next year”. 

The laid-off workers have been promised 10 weeks of pay, and healthcare coverage till April, and recruiting assistance. The CEO added that employees who had been there for more than four years will get an extra four weeks of pay. 

What does this mean for Silicon Valley's future? The post-pandemic future for tech companies is as uncertain as ever. Meta's example shows how destructive overhiring and overstaffing can be for the long run; while BYJU'S reveals its blunder of job duplication with more and more people getting involved in jobs that can be handled by fewer workers.

  • Perhaps the most pessimistic yet straightforward announcement was from the head honchos of Lyft, who warn their employees of a recession in the global economy next year -- and serves as a warning for the rest of the tech world as well. 
Last updated: November 10, 2022 | 15:17
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