A study conducted by the American Psychological Association shed light on the profound psychological toll of being laid off, ranking it among the most distressing life events — surpassing even the anguish of divorce or the loss of a loved one. Adding weight to this revelation, Edelman's 2022 Trust Barometer revealed that a staggering 85% of respondents identified job loss as their primary concern. Despite the grim reality painted by these findings, the year 2023 witnessed an alarming trend: a staggering 96% of businesses resorted to some form of downsizing, as reported by data from Randstad RiseSmart.
Yet, the spectre of job insecurity still looms large over the workforce. As we venture into 2024, the reverberations of these actions continue to be felt. The tech sector, in particular, bore the brunt of this turmoil, with nearly 25,000 workers facing layoffs in the first month of the year alone. And the ripple effect extends beyond tech, touching industries ranging from gaming to retail and even human resources. Let’s delve into the heart of the matter, uncovering the companies behind these layoffs.
Biggest layoff of January 2024
Google initiated extensive layoffs across several divisions, including hardware, voice assistant, advertising sales, and YouTube teams. Additionally, its research firm X, under Alphabet, also underwent downsizing. The restructuring aimed to streamline operations and attract external investment for ongoing projects. Astro Teller, head of X, highlighted the emphasis on spinning out more projects independently.
Cult.fit, formerly known as Cure.fit, implemented its first round of layoffs in three and a half years, affecting approximately 150 employees. The terminations spanned various departments, impacting senior and mid-level positions. Despite media reports estimating the layoffs between 130 to 150 employees, Cult.fit countered suggestions that the move aimed to extend its financial runway or reduce costs. Instead, a company spokesperson clarified that the terminations formed part of their routine annual planning process, intended to streamline operations for enhanced productivity and future profitability.
3. Tata Steel
Tata Steel announced plans to shutter two blast furnaces at its British facilities by year-end, a move set to impact approximately 2,800 jobs at its Port Talbot steelworks in Wales. This decision aligns with Tata Steel's strategic pivot towards lower carbon electric arc furnaces, bolstered by a substantial government investment of £500 million ($634.10 million), as reported by Reuters. Anticipating around 2,500 job reductions over the next 18 months, Tata Steel will prioritise voluntary redundancies as part of its workforce adjustment strategy. CEO T V Narendran emphasised the imperative of this decision for the company's long-term sustainability, despite acknowledging the inherent challenges.
Amazon initiated another round of job cuts, affecting 'several hundred' employees within its Prime Video and MGM Studios division. Mike Hopkins, Senior Vice President of Prime Video and Amazon MGM Studios, outlined in an internal memo that these layoffs are part of the company's strategy to streamline operations by prioritising high-impact content and product initiatives. While the precise number of affected employees remains undisclosed, Amazon clarified that the reduction would constitute a relatively small percentage of Hopkins' team.
These job cuts are attributed to challenges stemming from Amazon's acquisition of MGM for $8.5 billion in 2022. Despite the company's ongoing efforts to optimise its entertainment offerings, it acknowledges the enduring impact of the acquisition as a contributing factor to this decision. This latest move by Amazon is in alignment with its subsidiary Twitch, which recently announced intentions to lay off approximately 500 employees, representing around 35% of its workforce. Across the broader tech industry, including Silicon Valley and global offices, there has been a trend of layoffs, with the tech giant shedding over 27,000 jobs last year alone.
Flipkart announced a 5-7 per cent reduction in its workforce based on performance evaluations. These cuts, conducted as part of the company's annual performance reviews, are slated to be finalised between March and April. Flipkart, in an effort to rein in costs, has abstained from new hiring over the past year and is presently engaged in a $1 billion financing round. With a focus on optimising resources, the company is actively discussing restructuring plans and outlining its roadmap for 2024 in forthcoming meetings with senior executives.
Despite postponing its initial public offering until 2024, Flipkart's recent acquisitions, including Cleartrip, have contributed to a gross merchandise value (GMV) estimated at approximately $1.5-1.7 billion. The company remains committed to streamlining operations and reassessing its business strategies, recently securing $600 million in fresh capital from Walmart as part of its ongoing funding efforts.
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Frontdesk made waves with its sudden decision to dismiss its entire 200-person workforce via a brief two-minute Google Meet call. This sweeping action impacted employees across all categories, from full-time workers to part-time staff and contractors, indicating the startup's potential closure. While CEO Jesse DePinto hinted at the company's intent to pursue state receivership as an alternative to bankruptcy, Frontdesk has yet to issue an official statement on the matter.
Salesforce made headlines with its recent announcement of approximately 700 employee layoffs, constituting roughly 1% of its workforce, according to Wall Street Journal. This downsizing comes in the wake of a similar action last year, during which the company reduced its staff by around 8,000 employees, driven by investor pressure to cut costs. The decision reflects Salesforce's ongoing efforts to navigate the shifting landscape of the tech industry, where many companies are grappling with similar challenges and turning to layoffs as a means of adaptation.
Swiggy laid off approximately 400 employees, constituting about 6% of its total staff. This strategic realignment effort aimed to manage costs amidst challenging funding conditions. The layoffs primarily impacted departments such as customer support and tech teams. The restructuring initiative, which began last month at Swiggy's Bengaluru headquarters, is ongoing and could potentially affect sales, customer service, and tech divisions. There are concerns that further reductions may follow, particularly in the tech and sales departments, with a focus on high-salaried employees.
Microsoft embarked on a new round of layoffs within its gaming division, encompassing entities such as Activision Blizzard and Xbox. The company reduced its gaming workforce by approximately 1,900 positions out of a total of 22,000 team members. This decision, though challenging, is part of Microsoft's broader efforts to streamline operations and prioritise new initiatives. Phil Spencer, CEO of Microsoft Gaming, addressed employees in an internal memo, acknowledging the difficult decision to downsize the gaming workforce.
Discord, the widely-used messaging platform popular among gamers, confirmed the layoff of 170 employees, representing approximately 17 per cent of its workforce in January. This announcement follows a previous reduction of about 40 jobs in August, indicating a broader trend of companies implementing cuts at the start of the year. In an internal memo, Discord CEO Jason Citron explained that these layoffs are essential for the company to enhance efficiency, especially following a significant hiring surge in 2020. The Verge was the first to report on the job cuts and shared insights from Citron's memo. According to PitchBook data, Discord had a workforce of 870 employees as of August.
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