With the sudden shock of Covid 19, every sector suffered. While some businesses had to shut down, some giant tech companies hired more employees to provide better service to clients and customers. But if you think that is a good sign, then think again. Like every decision has consequences, over-hiring must come with certain unavoidable problems. Even though Covid is long gone, the result of the decision has been coming to the surface.
As a result, start-ups or medium-sized companies and tech giants have been lying off employees mercilessly. According to a report, more than 300 companies have laid off employees. Though the 2023 financial year was supposed to start on a good note, all we can see is the mass layoff of all the small and big business sectors.
Why Are These Layoffs Happening in 2023?
Simply put, there is no one reason why layoff is happening this year. Instead, various companies have provided multiple reasons to justify their decision to eliminate employees from their companies. One of the biggest examples of layoff is Byju’s, the Indian Edtech company. This year, it has sacked senior employees earning more than a crore per annum.
Right after the battle with Covid 19, the Ukraine-Russia war has been one of the reasons why the world has been experiencing inflation for almost three consecutive years. While the Government is struggling to provide the best service to the citizens, the companies are also trying to design their strategies to make plans for the next financial year.
While making decisions about its mass layoff of 3900 employees, companies like IBM did not mention why they simultaneously cut off so many employees. However, he vaguely said maintaining the standard cost this year. In a Bloomberg interview, Kavanaugh explained that the typical cost has no relationship with asset disposals. That is why the employees will get laid off from the company.
So many reasons are responsible for this global layoff in 2023. But all the bases are rooted in the main reason, inflation. So now, the companies have been trying to provide the best service to the customers while maintaining a healthy workflow.
Companies That Has Announced Cut off of Employees in 2023
As mentioned earlier, regardless of the name, profit and loss, all companies have been cutting off employees to plan for the financial year 2023. Some companies that have announced a mass layoff this year are more than three hundred. But we have made a list of companies that have announced cuts in their employees this year.
Stripe: This digital payment firm has decided to cut off around fourteen per cent this year. With this deduction in employees, the company will have around seven thousand active employees.
Twitter: After the takeover of Twitter by Elon Musk, the owner and CEO have reportedly cut off numberless employees from Twitter. After buying Twitter, Musk fired the previous CEO, Parag Agarwal. Since then, he has fired around three thousand and seven hundred employees from the micro-blogging platform.
Amazon: The e-commerce giant Amazon has also announced that it will lay off many employees to balance costs. The company has stated that the company-wide layoffs will impact more than eight thousand employees. The current CEO of Amazon, Andy Jassy, has provided two reasons for this mass layoff this year. First, he said that the ‘uncertain economy’ and ‘rapid hiring’ instigated the mass layoff.
SAP: The German software company has been looking to explore the sale of its remaining stake in Qualtrics. So, it has been focusing on cutting costs to shift its focus to the cloud business. That is why SAP has announced its plans to cut off three thousand jobs, which is around 2.5 per cent of its workforce.
Dell: Dell has been suffering from low demand for its personal computers. It has now admitted that it has been experiencing a market condition that continues to erode with an uncertain future. That is why just like any other tech company, Dell has also announced to cut off employees this year. Dell Technologies Inc will eliminate around six thousand six hundred and fifty job posts, about five per cent of its workforce.
Zoom: Zoom announced at the start of the year that it has decided to cut off around thirteen hundred employees, which is around fifteen per cent of its workforce. The CEO of Zoom, Eric Yuan, has already observed that this mass layoff will affect the entire company. However, he is about to make some serious compromises to help the company grow more than before. In a blog post, Eric Yuan announced that he would forgo around ninety-eight per cent of his salary to prepare for the fiscal year 2023. He added, “members of my executive leadership team will reduce their base salaries by 20% for the coming fiscal year while also forfeiting their fiscal year 23 corporate bonuses.”
ShareChat: Indian social media start-up ShareChat, backed by Google, has also announced a huge employee cut-off. It has stated that it is cutting off twenty per cent of its workforce to prepare for the coming year and avoid financial trouble in the fiscal year 2023.
A spokesperson of the company has stated the decision was taken after deliberation and continued by saying that the investment will be very cautious throughout the year 2023. It is because the company will soon sack around four hundred employees from two thousand two hundred.
Google: When it comes to mass layoff, Google, one of the biggest tech titans, is not out of the list as well. It has also announced that the company will cut off around twelve thousand posts to balance its revenue. With cutting off twelve thousand employees, Google has decided to cut off six per cent of its workforce.
Sundar Pichai, the CEO of Google, has taken full responsibility for the decision. He has also announced that the employees will get sixteen weeks of severance and six months of health benefits.
The news came around four months after Google’s parent company, Alphabet, posted the report showing lower numbers in its revenue. However, while Alphabet has established six per cent less growth, Google Cloud has grown about thirty-eight per cent yearly, making it worth $6.9 billion.
With inflation skyrocketing, every company has been battling to manage their revenues. Whether it is a big tech giant or a start-up, all companies have been experiencing the worst days in years. Even though some have justified their action by blaming the over-hiring during covid, not being able to balance the revenue with the rising cost of simply running the companies is one of the most prominent reasons for this mass layoff. Unfortunately, it is not about to stop very soon.