Massive Layoff Surge in Big Tech, Twitter and Stripe!

A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees (collective layoff) for business reasons, such as personnel management or downsizing (reducing the size of) an organization.

Tech companies are once again tapping the brakes on hiring as they contend with sluggish consumer spending, higher interest rates and the impact of a strong dollar overseas.

Tech companies made moves earlier this year to rein in costs, with many of the industry’s biggest firms freezing hiring or cutting some departments. Even Apple Inc., which has outperformed most of its peers this year, is slowing spending. But some tech giants are finding that they now need to take more dramatic steps to trim their expenses.

Amazon

The e-commerce titan halted “new incremental” hiring across its corporate workforce — a decision Chief Executive Officer Andy Jassy and his team made this week.

The digital-banking startup Chime Financial Inc. is cutting 12% of its staff, or 160 people.

Digital Currency Group

Cryptocurrency conglomerate Digital Currency Group embarked on a restructuring last month that saw about 10 employees exit the company.

Galaxy Digital

Galaxy Digital Holdings Ltd., the crypto financial services firm founded by billionaire Michael Novogratz, is considering eliminating as much as 20% of its workforce.

Intel

Intel Corp. is cutting jobs and slowing spending on new plants in an effort to save $3 billion next year, the chipmaker said last week.

Lyft

Lyft’s cost-saving efforts include divesting its vehicle service business.

Seagate Technology Holdings Plc, the biggest maker of computer hard drives, said last week that it’s paring about 3,000 jobs.

Stripe

Payments company Stripe Inc., one of the world’s most valuable startups, is cutting more than 1,000 jobs.

Twitter

The upheaval at Twitter has more to do with its recent buyout — and the accompanying debt — than economic concerns.

Upstart

Upstart Holdings Inc., an online lending platform, said in a regulatory filing this week it cut 140 hourly employees “given the challenging economy and reduction in the volume of loans on our platform.”

Big Tech Layoffs : Google, Amazon, Apple, Meta and Microsoft

Big Tech, also known as the Tech Giants, Big Four, or Big Five, is a name given to the four or five most dominant companies in the information technology industry of the United States.

The Big Four presently consists of Alphabet (Google), Amazon, Apple, and Meta (Facebook)—with Microsoft completing the Big Five.

A slate of high-profile tech firms announced thousands of layoffs and disclosed plans to freeze hiring for the time being, as a brutal confluence of events—still-rising interest rates, global economic uncertainty, and a slowdown in consumer and ad spending growth, among others—

News of job cuts came down at rideshare outfit Lyft (13% of staff, about 700 employees); fintech startup Chime (12%, 160 employees); payments company Stripe (14%, 1,000 employees); home-flipper Opendoor (18%, 550 employees); and social media giant Twitter (about 50%, or 3,700 employees, were expected to get the ax Friday).

On top of those layoffs, Amazon CEO Andy Jassy said his tech conglomerate will pause hiring for corporate positions “for the next few months,” and Bloomberg reported that Apple has suspended hiring for many non–research and development roles.

Big Tech has always had a firing problem

The tech sector has long lived in a fantasy world of limitless cash and seemingly uncapped growth.

Big Tech has always had trouble accepting a reality in which it is not a deity basking under the glow of the California sun, somehow impervious to the ordinary plights of the common business.

But now, as the facade crumbles and the shortcomings of the industry are laid bare, it is ultimately the tech employees who are left to suffer the consequences. The rose-colored glasses are off, and workers can finally see past the rhetoric and marketing materials that drew them to the supposed promised land of Silicon Valley to the reality that, at the end of the day, even tech companies have just one audience to appease: Wall Street.

Huge Wave of Layoffs on Silicon Valley

One of the clearest indicators yet that an economic downturn is knocking at the door began flashing red this week, when a number of U.S. tech companies announced widespread layoffs or hiring freezes.

Amazon announced it would no longer fill certain corporate positions, while Apple said it would stop hiring in most departments. In doing so, they join other megacap tech companies including Facebook parent Meta and Google parent Alphabet that have frozen hiring over the past few months.

Meanwhile, younger tech companies including payments provider Stripe and ride-hailing business Lyft resorted to layoffs—both saying the souring economy was becoming increasingly unfavorable for tech. More tech layoffs may be coming soon with new Twitter owner Elon Musk expected to cut half the social media company’s workforce by 3,700 jobs as early as Friday.

Over the past decade, tech companies boasted enormous growth—and spent lavishly, too. But with a global recession on the horizon that could be much longer and harsher than many expect, Silicon Valley firms that announced major layoffs this week could be a bellwether for the larger economy.

Elon Musk’s Twitter layoffs leave whole teams gutted

About half of Twitter’s 7,500 employees are now gone, with teams focused on trust and safety issues hit the hardest.

The areas of Twitter impacted the most by Musk’s cuts include its product trust and safety, policy, communications, tweet curation, ethical AI, data science, research, machine learning, social good, accessibility, and even certain core engineering teams, according to tweets by laid-off employees and people familiar with the matter. More company leaders, including Arnaud Weber, VP of consumer product engineering, and Tony Haile, a senior director of product overseeing Twitter’s work with news publishers, have also been laid off following Musk’s firings of Twitter’s senior leadership last week.

Twitter co-founder Jack Dorsey apologizes after Elon Musk’s team begins mass layoff days after $44 billion takeover : “I own the responsibility for why everyone is in this situation: I grew the company size too quickly. I apologize for that,” Dorsey tweeted Saturday.

why so much of tech is in freefall?

Stripe, a financial services and software company that’s one of Silicon Valley’s most prominent and valuable startups, announced on Thursday it was laying off 14% of its workforce.

Founders Patrick Collison and John Collison took full responsibility in their memo, detailing the company’s “very consequential mistakes” that led to layoffs. Namely, it was far too optimistic about growth and failed to rein in costs as it grew quickly.

While the founders’ candor about the strategic errors in a public memo is unique, the mistakes themselves are not. The errors Stripe made are the same as many other tech companies. Here’s what they say Stripe did wrong over the last several years — and so did many of its peers.

The freeze deepens: Amazon and Apple pause hiring, Lyft and Stripe lay off workers

Tech’s layoffs and hiring freezes are deepening, as Amazon.com Inc. today announced a pause in new hires, Lyft Inc. and Stripe Inc. said they are laying off hundreds of employees amid the worsening economy, and even Apple Inc. was reportedly holding off on new hires outside research and development roles.

Amazon, which had previously announced it would freeze hiring for corporate jobs in its retail operation, said today that it will also pause hiring for the same roles throughout the company. Amazon human resources chief Beth Galetti said in a memo today that the company expects to keep the pause in place for “the next few months” and adjust as economic conditions change, though it also said it will replace some employees and continue to “hire people incrementally” in targeted areas.

“We still intend to hire a meaningful number of people in 2023, and remain excited about our significant investments in our larger businesses, as well as newer initiatives like Prime Video, Alexa, Grocery, Kuiper, Zoox and Healthcare,” Galetti wrote.

The move follows Chief Executive Andy Jassy moving quickly to cut expenses in the past few months, shutting down its telehealth service and getting rid of warehouse space.

Tech workers brace for massive wintertime layoff surge

Layoff and hiring freezes are cascading across America, after a record boom lulled many employers and employees into a false sense of security.

Why it matters: In statement after statement, companies warn they’re preparing for dire times.

Twitter today is taking the extreme step of locking its offices and suspending employees’ badge access, as new CEO Elon Musk begins mass layoffs expected to cut deep into the platform’s 7,500 employees.

In an ominous email to staff, Twitter said cuts will begin at noon ET: “In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday.”

Internal plans earlier this week had Musk looking to cut 3,700 Twitter staff, or about half the workforce, Reuters reports.

The email said employees not laid off will find out via their work email. Staff who are losing their jobs will be notified with next steps to personal email addresses.

What’s happening: During the past decade, tech workers got used to high salaries, plush benefits and tons of opportunity. Workers in other industries were paying a heavy price for the pandemic. But tech continued to prosper.

Effects of layoffs to the employee

Employees (or former employees in this case) can be affected in a couple of different ways.

When an employee is laid off, his or her general trust in long-term work may decrease, reducing expectations upon rehire. After an employee withstands a layoff, the effects can trickle into future employment and attitudes.

Layoffs in the workplace often leave the former employee less inclined to trust future employers which can lead to behavioral conflicts among co-workers and management. Despite new employers not being responsible for a prior circumstances, job performance may still be affected by prior layoffs. Many companies work to make layoffs as minimally burdensome to the employee. At times employers may layoff multiple people at once to soften the impact.

Denial stage is the first stage in the emotional reaction to change or layoffs, in which an employee denies that an organization change or layoff will occur.
Anger stage is the second stage of the emotional reaction to downsizing, in which an employee becomes angry at the organization.

Fear stage is the third emotional stage following an announcement of layoff, in which employees worry about how they will survive financially.
Acceptance stage is the fourth and final stage of the emotional reaction to downsizing, in which employees accept that layoffs will occur and are ready to take steps to secure their future.