More than 20,000 people working in tech lost their job in January, continuing the 2023 trend when 250,000+ were ditched after companies hired heavily in the pandemic and couldn’t justify headcount amid slowing customer spending.
The layoffs.fyi website estimates that some 85 tech businesses laid off 23,770 in the month to date, including many household names and others that some readers might have not heard of. The site has tracked job losses since 2020.
The latest tech organizations planning to lighten the payroll include Microsoft’s Gaming division, which told 1,900 staff members (or nine percent of the unit’s 22,000 workforce) that they are surplus to requirements, just three months after closing its $69 billion purchase of Activision Blizzard.
In a memo to employees, Microsoft Gaming CEO Phil Spencer dressed the job losses as being part of leadership “aligning on a strategy and an execution plan with a sustainable cost structure.”
“As part of this process, we have made the painful decision to reduce the size of our gaming workforce by approximately 1,900 roles out of 22,000 people on our team,” he said in note.
In classic corp-speak, he claimed that Microsoft was “grateful for all the creativity, passion and dedication they have brought to our games, our players and our colleagues.” He added: “Although this is a difficult moment for our team, I’m as confident as ever in your ability to create and nurture the games, stories and world that bring players together.”
Microsoft last year made a series of job cuts but the most significant was waving goodbye to 10,000 colleagues in one round by the end of March.
Also making moves this week was Salesforce, which is reportedly trimming the payroll by 700 heads, or one percent of the workforce. The size of the cuts isn’t dramatic, indicating perhaps that this is getting rid of underperformers, but it’ll add to the employment bonfire.
It follows some dramatic moves by the SaaS biz in 2023 when it chopped 7,000 jobs in one announcement to “reduce costs” and “improve operating margin” under pressure from activist investor Elliott Management.
Yesterday, IBM said it was working toward annual run rate cost saving of $3 billion by the end of 2024, and “workforce rebalancing” would play a part. And last week Google’s CEO confirmed it was going to be making continued cuts across the business after axing 1,000 roles earlier this month.
- Microsoft axes 10,000, already breaking bad news to staff
- Salesforce to chop 10% of workforce in $1.4 billion restructuring blueprint
- ‘Only 700 new IT jobs’ were created in US last year
- Alphabet CEO tells Googlers: More job cuts on the way
Just 700 tech jobs were created in 2023 – net – versus 2022, and this is shaping up to be a difficult year too, one in which employees fear for their livelihood. This is despite forecasts that IT spending is going to grow again this year, indicating that maybe not every tech vendor agrees.
Or perhaps the continued redundancies are based on copycat behavior and the industry’s seeming addiction to erasing employees in pursuit of bigger shareholder dividends. ®
