The invasion set off a chain reaction that led to a steep rise in gas prices and deteriorating macroeconomic conditions, pushing the West to the verge of recession and affecting the livelihoods of thousands around the world in the form of tech layoffs.
Geopolitical volatility in Europe was bound to have drastic effects on the post-pandemic global economy. After two years of staggering growth during the pandemic, online businesses were caught out when Covid began to fade. Russia’s invasion proved the final straw. Suddenly, tech companies found themselves with far too many employees, and proceeded to conduct layoffs for the rest of the year.
What led to the layoffs?
The EU depends on Russia for almost 40% of its gas needs. European nations ended the import of Russian oil by sea as a part of their sanctions while the UK has stopped importing gas from Russia and plans to phase out oil imports by the end of the year. The US also stopped the import of Russian fossil fuels. These sanctions resulted in a jump in oil prices, which then triggered inflation globally.
Although not the only reason for the ongoing spree of tech layoffs, inflation did cause businesses around the world to rethink their organisational structure, leading to job cuts.
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Tech businesses across the world, while adapting to the pandemic world, hired swathes of people in the misguided belief that accelerated growth was here to stay as people became more and more dependent on technology. But as the world returned to normal, many tech firms found they had made an error by assuming pandemic-era growth would continue unabated.
From Big Tech to homegrown startups, here are some of the tech companies that cut jobs in 2022.
Meta
On November 9, Meta CEO Mark Zuckerberg
announced the company would be cutting 13% of its workforce, or about 11,000 employees, in one of the biggest rounds of tech layoffs ever.
In a note to Meta employees, Zuckerberg said that going ahead, the company would make further cuts on discretionary spending and extend the freeze on fresh hiring until March 2023.
Zuckerberg’s note said as more people stayed online during the Covid-19 pandemic, Meta expanded its investments since it hoped the trend would continue post-pandemic as well.
“Unfortunately, this did not play out the way I expected. 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. I got this wrong, and I take responsibility for that”, Zuckerberg said.
After going back and forth on his proposal to buy Twitter, Elon Musk bought the company on October 27, marking the beginning of sweeping changes. Musk started with firing Parag Agarwal, the company’s then CEO, along with other top executives.
Musk then went on to fire 3,700 people, representing 50% of the company’s workforce, citing a drop in revenue. Layoffs at Twitter became one of the most talked-about events of the year, with some employees having their access to the company’s internal communication channels revoked before they were sacked. The company even shut down its offices in major cities including San Francisco and London to prevent fired employees from accessing the offices.
Amazon
A week after Meta announced layoffs, fellow tech giant Amazon reportedly decided to cut as many as 10,000 jobs, representing 3% of its employees. According to a New York Times report published on November 14, the Seattle-based company was looking at laying off employees starting January 2023. The job cuts will affect Indian employees as well. ET reported on November 16 that the company was planning to fire a few hundred employees from its almost 100,000-strong workforce in India.
Earlier this month, Amazon CEO Andy Jessy
defended the layoffs, saying “We just felt like we needed to streamline our costs.”
After reports of Amazon firing its staff in India emerged, the company was summoned by labour authorities, who sought an explanation.
Amazon said in its reply the employees weren’t sacked but left under a voluntary separation programme which included a severance package.
The California-based internet giant’s parent firm Alphabet, plans to join the Big Tech layoff spree, according to a November 23 report by The Information. The report said that managers at the tech giant have been asked to identify the poorest-performing 6% of employees, which equates to about 10,000 people in total.
The company is then expected to start firing them in early 2023, the report said.
According to other reports, the company’s CEO Sundar Pichai also told his employees he “cannot promise that layoffs are not coming”.
Microsoft
Technology giant Microsoft
sacked around 1,000 people in a round of layoffs in October, according to US news website Axios.
This was the third round of layoffs at the Big Tech firm since July. Microsoft had fired nearly 1% of its 180,000-strong workforce across offices and product divisions in July as part of a ‘realignment’. It fired another 200 employees from one of its customer-focused R&D projects in August.
Layoffs at Indian startups
The Indian startup ecosystem, struggling amid the ongoing funding winter, saw almost 18,000 people across 52 startups being fired in 2022.
Edtech giant
Byju’s said in October that it would cut – or “rationalise” – about 5% of its 50,000-strong workforce across departments such as product, content, media and technology in a phased manner. This would translate to about 2,500 people losing their job.
Another Indian edtech firm, Unacademy, fired hundreds of employees in two rounds during the past year. In April,
the company fired about 1,000 full time and contractual employees in a cost cutting exercise, with another round of layoffs following in November,
when the company fired 350 people, or 10% of its workforce.
Vedantu was another edtech firm that cut its workforce in 2022. The company laid off more than 1,000 people across four rounds, with the latest of which was in early December, when it laid off 385 staffers. The company had earlier cut 624 jobs in two rounds in May, followed by another 100 layoffs in July.
In April, ecommerce firm Meesho
laid off 150 employees from its grocery business, which it had recently restructured and rebranded as Meesho Superstore from Farmiso. The company said it would integrate the grocery vertical into its main app, leading to talk of redundancies within the firm.
Chennai- and US-based SaaS company
Chargebee cut 10% of its workforce, affecting 142 people, in response to tougher market conditions marked by recessionary trends in the North American market, higher inflation rates and the growing need among VC-backed companies to accelerate on the journey to profitability.
ET reported on Jul 29 that cab aggregator firm Ola was planning to fire 1,000 employees, while hiring aggressively for its EV business.
Other Indian startups that cut jobs in 2022 include Oyo, MPL, Udaan, Cars24 and Lead.
Other tech layoffs
Tech companies like Lyft, Stripe, Salesforce, Roku and Doordash also conducted layoffs in 2022.
Netflix, the pioneer of streaming services, cut hundreds of jobs in two rounds, firing 150 people in April, followed by a 4% cut to its workforce, firing 300 people.
Lyft fired almost 700 people in early November, representing about 13% of its workforce. The company called it a cost-cutting measure, necessary in a weakening economy.
Fintech firm Stripe also cut about 14% of its workforce, firing more than 1,100 employees. In an email to his employees, CEO Patrick Collison said that the company was “facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding”.
Cloud-based software company Salesforce fired hundreds of employees in early November,
according to news reports. The company, in a statement said “Our sales performance process drives accountability. Unfortunately, that can lead to some leaving the business, and we support them through their transition”.
