Tech firms slash jobs amid uncertainties: 8 high-profile layoffs in 2022

Meta Platforms is shedding 11,000 jobs, or 13 per cent of its global workforce. PHOTO: NYTIMES

SINGAPORE - Many tech companies have slashed jobs this year to curtail ambitions and brace themselves for tough times amid economic uncertainties, reversing their 10-year stock bull run. Here is a round-up of the layoffs announced by eight prominent technology firms in recent months.

Meta – 11,000 jobs

The most massive of these cuts was made by Facebook owner Meta Platforms, which is shedding 11,000 jobs, or 13 per cent of its global workforce, in an unprecedented move in the firm’s 18-year history. More than 50 of the affected positions were located in Singapore.

Nearly half of all affected jobs were technology roles. The rest of the affected positions were in business and recruitment.

The social media giant in October issued a weak forecast for its fourth-quarter revenue, short of Wall Street’s expectations for earnings. The company said revenue for the quarter would be US$30 billion to $32.5 billion (S$41.2 billion to S$44.6 billion), although analysts were expecting sales of US$32.2 billion. 

Prior to this, Meta had posted two consecutive quarters of revenue declines. Revenue fell 4 per cent in the third quarter of 2022, while costs and expenses ballooned 19 per cent year on year to US$22.1 billion. Operating income for the third quarter declined 46 per cent from the previous year to US$5.66 billion.

Overall, Meta is facing a broad slowdown in online ad spending amid soaring costs and interest rates and stiffening competition from TikTok.

This is exacerbated by challenges from Apple’s iOS privacy update that cut off Meta’s access to user data that powered its ad-targeting systems.

Starting with Apple’s iOS 14.5 and iPadOS 14.5, all apps are required to ask users’ permission when they want to track users across third-party apps and websites. Users can also change their preferences for any app or block apps from asking for permission.

Last Friday, Meta chief technology officer Andrew Bosworth, who runs the metaverse-oriented Reality Labs division, told employees that the firm would stop developing its Portal smart displays, known for their video-calling capabilities, and smartwatches.

Meta would also be combining a voice- and video-calling unit with other messaging teams. A new division, called Family Foundations, focused on tough engineering problems would be set up. 

Twitter – about 3,700 jobs

Shortly after closing his US$44 billion purchase of social media platform Twitter in late October, billionaire Elon Musk reportedly slashed half the company’s workforce, or around 3,700 employees, to lower costs. Mr Musk said Twitter was losing more than US$4 million a day.

In July, the company reported that second-quarter revenue fell 1 per cent from a year earlier to US$1.18 billion, missing both top and bottom lines and user growth. It attributed the weak results to a weak macroeconomic environment and the online advertising market.

Mr Musk had begun dropping hints about his staffing priorities before the deal closed, saying he wanted to focus on the core product.

“Software engineering, server operations and design will rule the roost,” he tweeted in early October.

The job cuts spanned various teams, such as engineering, sales and marketing. The Singapore office was not spared, although it is not known how many positions were affected.

Stripe – about 1,100 jobs

Online payments giant Stripe laid off roughly 14 per cent of its workforce, or about 1,100 employees, in late October to reset its costs amid rising inflation and interest rates and a looming recession.

More than 30 affected Stripe employees have put their names in a widely circulated list of retrenched tech workers, a spreadsheet put together by two tech researchers in Singapore to help people find jobs.

Chief executive officer Patrick Collison wrote in a memo to staff on Nov 3 that the cuts were necessary to correct its leadership’s errors of judgment.

“We were much too optimistic about the Internet economy’s near-term growth in 2022 and 2023, and underestimated both the likelihood and impact of a broader slowdown,” he said.

The firm also allowed operating costs to balloon and inefficiencies to seep in, even though 2022 represented the beginning of “a different economic climate”.

Stripe was valued at US$95 billion in 2021, and reportedly lowered its internal valuation to US$74 billion in July.

Shopee – about 180 jobs

Singapore-based e-commerce start-up Shopee started laying off global staff in June 2022, citing widening losses and slower revenue growth.

In a June 13 memo to staff, Shopee group president Chris Feng wrote: “Given elevated uncertainty in the broader economy, we believe that it is prudent to make certain difficult but important adjustments to enhance our operational efficiency and focus our resources.”

It slashed more jobs in September as its Singaporean parent company, Sea Group, faced pressure to turn profitable.

When announcing its second-quarter earnings in August, Sea suspended its 2022 revenue forecasts for Shopee, which had contributed 60 per cent of its total revenue in the previous quarter.

About 180 employees, or 3 per cent of its workforce, were reportedly laid off in Singapore, China and Indonesia in total. Cuts were made to teams, including human resources, regional operations, marketing and engineering.

Shopee also closed operations in Argentina, Chile, Colombia and Mexico in September. Job cuts in June primarily affected its ShopeeFood and ShopeePay businesses.

Shopify – 1,000 jobs

In July, Canada-based e-commerce giant Shopify announced that it laid off 1,000 workers, or 10 per cent of its global employees, amid a pullback in online spending.

In a memo to staff, chief executive officer Tobi Lutke acknowledged that he had misjudged how long the pandemic-driven e-commerce boom would last. Most of the cuts were in recruiting, support and sales. Across the company, Shopify also cut over-specialised and duplicate roles.

Founded in 2006, Shopify began operating in Singapore in 2013. It is not known how many employees here were affected.

GoTo – 1,000 jobs

On Nov 11, Indonesia’s largest Internet firm GoTo reportedly said it would lay off 1,000 workers to shore up its finances amid an economic slowdown, rising interest rates and accelerating inflation.

The Jakarta-based company, which also operates in Singapore and Vietnam, planned to announce the cuts to its employees in the coming weeks. The size of the reduction could change as it rationalises its teams across ride-hailing, e-commerce and fintech.

GoTo is slated to announce its quarterly results on Nov 21. In August, it reported that its second-quarter adjusted loss before interest, taxes, depreciation and amortisation widened to 4.14 trillion rupiah (S$366.3 million) from a pro forma loss of 3.9 trillion rupiah a year earlier.

Formed through a merger of ride-hailing provider Gojek and e-commerce firm Tokopedia, GoTo went public in April in one of the year’s biggest initial public offerings. But its shares have lost about 40 per cent since. GoTo had 9,630 permanent employees at the end of June.

Netflix – 450 jobs

In May, streaming service Netflix eliminated 150 jobs after it reported its first subscriber loss in a decade. In late June, it announced a further 300 layoffs, or 3 per cent of its total workforce.

Most of the laid-off employees were based in the United States, although some cuts were made in the Asia-Pacific, Latin America, Europe, the Middle East and Africa. It is not known how many employees in Singapore were affected.

In the third quarter, it added more than 2.4 million subscribers – mainly from outside the US. Netflix now has 223 million subscribers worldwide. It lost 200,000 subscribers in the first quarter and nearly one million in the second.

Microsoft – about 1,000 jobs

In October, Microsoft said it laid off about 1 per cent of its global workforce, or about 1,000 employees, following its slowest revenue growth in more than five years in the most recent quarter.

The tech giant posted an 11 per cent increase in revenue to US$50.1 billion for the quarter that ended in September, as profit fell 14 per cent to US$17.6 billion from the year before. Quarterly revenue growth is typically in the range of 12 per cent to 22 per cent.

The layoffs were spread out across the company, but some of the most impacted divisions included gaming and government services. It is not known how many employees in Singapore were affected.

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