Tech Layoffs 2023: Furthermore, it has been revealed that in October 2022, Spotify fired 38 staff members from its Parcast and Gimlet Media podcast studios.
Tech layoffs 2023 According to people familiar with the plans, Spotify Technological SA is considering making layoffs as early as this week. Spotify joins a host of other technology companies, such as Amazon.com Inc. and Meta Platforms Inc., in announcing job cuts to reduce expenses.
Tech layoffs 2023 The people didn’t say how many positions would be destroyed. In October, 38 employees from Spotify’s Gimlet Media and Parcast podcast studios were let go. Approximately 9,800 people work for the industry leader in music streaming, according to its third-quarter results report.
During the epidemic, tech businesses increased their employee counts, but due to decreased advertising revenue and a bleak economic outlook, they were compelled to make reductions. Among the largest businesses to recently announce staff reductions were Amazon.com, Meta, and Microsoft Corp. Google parent Alphabet Inc. announced Friday that it will eliminate approximately 12,000 employees, or more than 6% of its global workforce.
The anticipated cuts were not discussed by a spokeswoman for Spotify.
Beginning in 2019, the corporation made a significant investment in podcasting. It invested more than $1 billion to purchase podcast networks, production tools, a hosting platform, and the rights to well-known programmes like The Joe Rogan Experience and Armchair Expert.
However, the investments have put investors’ patience to the test. As investors questioned when they’d start seeing returns, shares fell 66% last year. In June, executives from Spotify predicted that its podcast division would turn a profit in the next one to two years.
38 employees from Spotify’s Gimlet Media and Parcast podcast studios lost their jobs in October last year, the company reported. For tech workers everywhere, 2023 got off to a horrible start. In the first 15 days of this month, 91 organisations fired more than 24,000 tech professionals, indicating that things will only get worse.
According to the layoff tracking website Layoffs.fyi, 24,151 tech workers lost their jobs, primarily at companies like Amazon, Salesforce, Coinbase, and others. Crypto lending exchange Crypto.com announced last week that the company will reduce its global workforce by about 20% due to ongoing economic headwinds and unanticipated industry events.
In January, voice automated firm Skit.ai and Ola, which laid off 200 staff, dominated the news in India. Over 17,000 tech personnel were let go in December last year.
The website monitoring job losses since the epidemic began reports that 153,110 employees were laid off in 2022, with businesses including Meta, Twitter, Oracle, Nvidia, Snap, Uber, Spotify, Intel, and Salesforce leading the way.
November marked the lowest amount of layoffs ever, with 51,489 tech professionals losing their employment. Another major tech business, Google, is anticipated to take drastic measures to decrease its workforce in early 2023.
The Wave of LayOffs in Tech-
The tech industry has seen layoffs before, and Spotify may not even be the last. Even some of the most profitable industrial giants are reducing their personnel in order to save money. Google said late last week that it is cutting off 12,000 workers, or 6% of its workforce, across all regions. Additionally, Amazon disclosed that it would be laying off 18,000 workers.
11,000 other staff were also let go by Meta, the organisation that owns the social networking site Facebook, in November last year. That represented 13% of the company’s whole workforce across all locations. One of the first businesses to begin mass layoffs was Twitter. Musk recently disclosed that there are now only 2,300 individuals working at Twitter, which is 70% less than there were prior to Musk’s acquisition. Before the layoffs, Twitter employed 7,500 people.
Tech Layoffs 2023: Why are tech superpowers laying off workers all around the world?
At the beginning of 2023, Google’s parent firm, “Alphabet Inc,” said it intended to fire up to 12,000 staff members. Sundar Pichai, CEO of Google, informed all employees of the news via email.
According to Sundar Pichai’s email, employees in the United States have already been informed of their pay, and employees in other countries will receive this information soon, subject to the laws and procedures of each country. He sent an additional letter of apology for this behaviour.
Shortly after Microsoft announced that it would be laying off 10,000 people this year, Google said that it would be doing the same. Before Microsoft, Mark Zuckerberg’s Meta said that it would soon lay off 10,000 employees.
In its statement, Google listed one of the factors contributing to the massive layoffs as the exit of major investors in light of the upcoming recession. According to the company, customers have cut back on their spending as a result of budget constraints brought on by the epidemic and inflation.
Tech layoffs 2023 Additionally, Microsoft announced in a formal statement that it has decided to reduce its global staff by about 5% due to the anticipated recession in 2023 as well as a decline in consumer demand for computers, most likely brought on by the recession and pandemic.
According to rumours, Mark Zuckerberg decided to implement a hiring block in order to improve the company’s finances after rising costs and declining ad sales forced Meta to announce the layoff of 10,000 employees across its several enterprises.
Analysts claim that the anticipated recession in the United States and Europe in 2023 is the main factor driving IT companies’ preference to lay off thousands of workers. Weak consumer demand, a quick increase in interest rates, investor pressure, and firm cost-cutting are further significant factors. Financial services, retail, energy, and the healthcare sector are also impacted by layoffs, which are not limited to the IT sector.
What led to layoffs
1. Fears of recession: Due to the widespread concern over the slowdown in the global economy, IT companies are reevaluating their spending and preparing for a possible downturn.
The year 2023 is expected to see a global recession, according to several economists. The International Monetary Fund (IMF) and World Bank have previously advised economies to prepare for a slowdown in the rate of growth.
The majority of the Community of Chief Economists at the World Economic Forum predict that geopolitical tensions will continue to influence the world economy and that there will be more monetary tightening in the US and Europe.
2. Weak consumer demand: high inflation and weak demand have been the world’s biggest problems since the beginning of 2022.
Following the global financial crisis, consumer price inflation has skyrocketed in almost all of the world’s major economies, including the US, UK, India, Japan, the EU, and others. Since the global economy was already suffering from the pressure of COVID-related lockdowns since 2020, the impact is being felt even more severely now. The war between Russia and Ukraine disrupted a key economic channel just as things appeared to be getting better gradually.
3. Rapid rate hike- Since the start of 2020, central banks have tightened monetary policy due to quick rate hikes and steadily rising consumer prices. Nearly all central banks resumed boosting important interest rates after a protracted pause.
The US Federal Reserve was the first to raise interest rates from below zero and is still doing so today. Other countries’ central banks have done the same.
Even if the global bank has warned against fast-boosting interest rates, it is seen as important to control the inflation that is on the rise.
4. Investor pressure: According to a report, Google’s personnel decrease is the result of investor pressure to embrace a more aggressive expense reduction plan. TCI Fund Management challenged the internet search behemoth to publicly announce a target for profit margins, increase share buybacks, and reduce losses in its portfolio of other ventures, including Alphabet’s Moonshot division, in an open letter in November.
5. Cost-cutting measures: Google has recently taken a number of cost-cutting measures, including scrapping the next-generation of its Pixelbook laptop and permanently closing its cloud gaming service, Stadia.
Tech layoffs 2023
1. What Does It Mean to Be Laid Off?
Being laid off refers to an employee’s temporary or permanent termination of their employment agreement due to business-related factors. One employee may be suspended individually or simultaneously by the company.
2. Why is Google laying off?
Google’s parent company, Alphabet, which went on a hiring spree during the pandemic, revealed Friday that it will lay off 12,000 employees.
3. Which companies have been laying off employees?
- Google (Alphabet) layoffs: 6% of workforce laid off (January, 2023)
- Microsoft layoffs: 4-5% of workforce laid off (January, 2023)
- Amazon layoffs: 1-2% of workforce laid off (January, 2023)
- Carta layoffs: 10% of the workforce laid off (January, 2023)
- Coinbase layoffs: 20% of the workforce laid off (January, 2023)
- Salesforce layoffs: 10% of workforce laid off (January, 2023)
- Goldman Sachs layoffs: 8% of workforce laid off (January, 2023)
4. Are layoffs legal in India?
According to the ID Act, companies with 100 or more employees must request the proper government’s authorization in advance before closing, cutting staff, or laying off employees.
Furthermore, any layoff or retrenchment that does not follow the ID Act’s guidelines is regarded as illegal.