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Salesforce to cut 10% of workforce, Amazon to cut more than 18,000 jobs in latest tech worker purge
Salesforce and Amazon announced major layoffs on Wednesday, beginning 2023 with significant cuts during what has already been a brutal period for the tech sector.
Amazon announced that its layoffs will impact more than 18,000 employees - the highest number so far at a major tech company.
Salesforce will lay off 10 percent of its workforce - or about 8,000 workers - after a period of over-hiring, according to its Co-CEO Marc Benioff, who said he took 'full responsibility' for the decision.
As the tech sector, and the economy as a whole, suffers, rumors have begun to circulate that original Amazon founder and CEO Jeff Bezos is mulling a comeback after the company's shares fell by more than half last year.
Salesforce Co-CEO Marc Benioff said he over-hired at the company during the pandemic, which is part of the reason the company will layoff 10 percent of its work force
Some are now predicting Amazon founder and former CEO may return
The prediction was issued by Michael Batnick at Ritholtz Wealth Management, who noted that Bezos could return to his ailing company, as Bob Iger did to Disney just weeks ago.
Salesforce, the largest private employer in San Francisco, joined a list of companies that are now saying they over-hired during the pandemic to become bloated just in time for the tech market to tank.
The business-software provider said that 'the environment remains challenging and our customers are taking a more measured approach to their purchasing decisions.'
Salesforce hired aggressively during the first two years of the pandemic as companies purchased products in order to pivot to remote work. The company also acquired the popular work message application Slack during that time.
Most of the layoffs will occur over the coming weeks, according to Benioff. The company's stock has plummeted nearly 46 percent in the last year.
Meta, Microsoft, Twitter, Vimeo and Lyft are also included on the list of major companies that have cut hundreds to thousands of jobs in recent weeks.
The Wall Street Journal reported that tech employers cut more than 150,000 jobs in 2022.
At Amazon, five percent of its corporate workforce will go.
The cuts are centered primarily in the massive company's devices business - Alexa - recruiting and retail operations, according to the WSJ. The cuts, 10,000 of which were reported in 2022, have already been going on for weeks.
On Wednesday, current Amazon CEO Andy Jassy addressed the cuts in a blog post, in which he wrote, 'Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so.'
Amazon also soared during the COVID pandemic as customers switched to online shopping for everything from masks and sanitizer to groceries and amusement. Amazon added hundreds of thousands of employees to keep up with demand.
When demand began to wane for e-commerce, Amazon initiated a broad cost-cutting review to reduce costs for units that were unprofitable.
Starting last spring, the company began making targeted cuts and instituted a hiring freeze before deciding to let employees go.
Salesforce and Amazon are the latest major tech sector companies to announce massive cuts
Struggling to meet massive pandemic demand, Amazon doubled its logistics network
Tech job cuts - including mass layoffs at Meta and Twitter - are accelerating
In recent weeks, a slew of tech companies have announced cost-cutting measures, with Amazon, Apple and Google-parent Alphabet all announcing hiring slowdowns or freezes.
For the tech sector, the pandemic boom has turned to a post-pandemic bust, as rising interest rates batter share prices and inflation cuts into profits.
The sector shed 9,587 jobs in October, the highest monthly total since November 2020, according to data from consulting firm Challenger, Gray & Christmas cited by Bloomberg.
Total job cuts announced by US-based employers jumped 13 percent to 33,843 in October, the highest since February 2021, a report said.
Meta
The Facebook-parent said in November it would cut 13 percent of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year as it grapples with a weak advertising market and mounting costs.
Meta said it would cut 13 percent of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year
Like its peers, Meta aggressively hired during the pandemic to meet a surge in social media usage by stuck-at-home consumers.
But but the pandemic boom-times have petered out as advertisers and consumers pull the plug on spending in the face of soaring costs and rapidly rising interest rates.
After plunging billions into CEO Mark Zuckerberg's Metaverse vision with little to show for it, Meta has been faced with rising costs and shrinking profits.
Meta, once worth more than $1 trillion, is now valued at $256 billion after losing more than 70 percent of its value this year alone.
'Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I'd expected,' Zuckerberg said in a message to employees, according to Reuters.
'I got this wrong, and I take responsibility for that.'
Zuckerberg delivered the grim news about job cuts on a call with hundreds of Meta executives
On a short call on Wednesday, a red-eyed Zuckerberg addressed employees but took no questions.
He stuck to a script that closely followed the wording in the morning's blogpost and called the increased investments in e-commerce a 'big mistake in planning.'
Twitter laid off half its workforce across teams ranging from communications and content curation to product and engineering following Elon Musk's $44 billion takeover.
The cutbacks affected roughly 3,700 employees, who learned their fate by email last week.
However, Bloomberg on Sunday reported Twitter was reaching out to dozens of employees who lost their jobs, asking them to return.
Twitter laid off half its workforce across teams ranging from communications and content curation to product and engineering
Musk previously said there was no other choice but to impose mass layoffs as the company loses hundreds of millions of dollars every year and needs a financial overhaul
Salesforce
On Wednesday, cloud-based software company Salesforce announced it will layoff 10 percent of its employees or about 8,000 workers.
CEO Marc Benioff cited a rough period for the tech sector as well as over-hiring during COVID-19 leading to the decision.
Several weeks ago, it quietly laid off hundreds of employees.
'Our sales performance process drives accountability. Unfortunately, that can lead to some leaving the business, and we support them through their transition,' a Salesforce spokesperson told CNBC in a statement several weeks ago.
Salesforce had 73,541 employees at the beginning of last year - it is the largest employer in the San Francisco area.
The company said in an August filing that headcount rose 36 percent in the past year 'to meet the higher demand for services from our customers.'
Amazon
Amazon said it would layoff 18,000 corporate and technology jobs what will be the largest job cuts in the company's history.
The move comes as the company reportedly lost $1trillion over the year after its stock plummeted from a high during the pandemic.
If the company goes through with its proposal to cut 10,000 jobs, it would lose about 3 percent of Amazon's corporate employees
The move comes after the company put a hiring freeze in place, affecting major teams including Prime Video, Alexa and Amazon Fresh.
'We're facing an unusual macroeconomic environment, and want to balance our hiring and investments with being thoughtful about this economy,' Beth Galetti, senior vice president of people experience and technology at Amazon, wrote in a memo, which was seen by the Wall Street Journal.
Intel
Intel Corp's CEO Pat Gelsinger told Reuters 'people actions' would be part of a cost-reduction plan.
The chipmaker said recently it would reduce costs by $3 billion in 2023, then ramping that up to $10 billion by 2025.
The adjustments would start in the fourth quarter, Gelsinger said, but did not specify how many employees would be affected.
Some Intel divisions, including the sales and marketing group, could be cut by up to 20 percent, Bloomberg News reported last month, citing people with knowledge of the situation.
Chipmaker Intel is reportedly planning major layoffs, likely numbering in the thousands, in the face of a slowdown in the personal computer market
The company had 113,700 employees as of July, when it slashed its annual sales forecast by $11 billion after missing estimates for second-quarter results.
Intel, based in Santa Clara, California declined to comment on the job cuts when reached by DailyMail.com in October.
Intel has been battered by shifting market trends, including the decline of traditional personal computers as smartphones and tablets rise in popularity.
Last quarter, global PC shipments, including desktops and laptops, declined another 15 percent from a year ago, according to IDC.
Microsoft
Microsoft laid off under 1,000 employees across several divisions last month, according to Axios.
The layoffs represent less than half of 1 percent of the company's 221,000 employees globally, ABC News reported.
But the job cuts affect everything from Microsoft's Xbox console gaming division to its cutting edge Microsoft Strategic Missions and Technology organization.
In a statement, Microsoft executives said: 'Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly.
Microsoft laid off under 1,000 employees across several divisions last month, according to Axios
'We will continue to invest in our business and hire in key growth areas in the year ahead.'
Microsoft executives previously announced in July that it was laying off less than 1 percent of its workforce and significantly slow hiring, as its revenue fell short of investor expectations.
The company recorded only $51.9 billion in revenue during the second quarter of the year, but was expected to rake in $52.4 billion.
It had previously recorded blockbuster growth during the COVID pandemic, when consumers and businesses turned to its products as they shifted to a work-from-home model.
Lyft
Ride-hailing firm Lyft said it would lay off 13 percent of its workforce, or about 683 employees, after it already cut 60 jobs earlier this year and froze hiring in September.
Lyft said in a regulatory filing it would likely incur $27 to $32 million in restructuring charges related to the layoffs.
'We are not immune to the realities of inflation and a slowing economy,' Lyft's founders wrote in the memo to staffers.
Ride-hailing firm Lyft said it would lay off 13 percent of its workforce, or about 683 employees, after it already cut 60 jobs earlier this year
The company's share price has fallen 76 percent since the beginning of the year and currently stands at around $10, compared to nearly $45 in January.
Announcing the job cuts in a memo seen by the Wall Street Journal, Lyft founders John Zimmer and Logan Green told staff: 'There are several challenges playing out across the economy.
'We're facing a probable recession sometime in the next year and rideshare insurance costs are going up.
'We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives.
'Still, Lyft has to become leaner, which requires us to part with incredible team members.'
Lyft has about 4,000 employees, not including its drivers.
Apple CEO Tim Cook told CBS Mornings on Monday he plans to freeze hiring
Apple
Though Apple has not yet announced any major layoffs, CEO Tim Cook told CBS Mornings that it is slowing some hiring as well.
'What we're doing as a consequence of being in this period, is we're being very deliberate in our hiring,' he said. 'That means we're continuing to hire, but not everywhere in the company are we hiring.'
At the same time, though, Cook said 'we don't believe you can save your way to prosperity."
'We think you invest your way to it,' he said.