Tech Company Layoffs In 2023: The Latest Cuts In Q1
While tech layoffs in 2022 rose to levels not seen in years even as many tech companies were desperate to find employees, the number of tech layoffs already unveiled in January indicate that the situation will only grow in 2023.
2023: The Tech Layoffs Continue
2022 became known as the year in which dozens of tech companies began to lay off thousands of employees even as many businesses have found it hard to attract qualified IT personnel. And 2023 seems to be following the same pattern, with a variety of tech companies cutting their workforces.
So far in 2023, 200 tech companies have laid off a total of 59,448 workers, according to layoffs-tracking website Layoffs.fyi.
The official unemployment rate for the U.S. as of December 2022 is 3.5 percent, which matches the 10-year low reached in February of 2020, just before the COVID-19 pandemic began. More tellingly, the tech industry unemployment rate is just under 2.0 percent as of December, according to CompTIA. However, CompTIA also reported that tech job postings fell from their peak of almost 400,000 in January 2022 to about 250,000 in December.
While layoffs can be hard on those who receive the pink slips, not all is doom and gloom. In the tech industry, companies, at least the larger ones, typically offer severance packages which include several weeks to months of pay along with several months of paid insurance and help finding new jobs.
In addition, those workers may not be unemployed for very long, as many companies not considered “tech companies” in the traditional sense depend on growing their IT capabilities in order to meet their customers’ needs.
The Los Angeles Times Wednesday reported that that the burst of the dot-com bubble in the early 2000s led to a wave of experienced tech personnel, particularly software engineers, entering the job market and helping fuel a new wave of IT spending. That could happen again, with newly-freed tech personnel now able to move to smaller tech companies with more flexibility, and to other companies looking to expand their IT capabilities.
CRN has compiled a list of tech companies that have laid off workers since Jan. 1 of this year. Note that this list of tech layoffs is focused primarily on companies with a major focus on the B2B IT sector, and does not include layoffs at consumer-focused companies such as Spotify. Nor does it include tech layoffs by companies not normally considered as tech companies but which may have laid off some of its IT employees.
Click through the sldieshow to see the list of tech companies that have instituted layoffs so far in the first quarter of 2023. CRN will update this list on an ongoing basis.
Wade Millward, Mark Haranas, David Harris, Kyle Alspach, Gina Narcisi, and Rick Whiting contributed to this story.
Salesforce: Plans To Lay Off 7,000
Cloud-based software developer Salesforce on Jan. 3 unveiled plans to lay off about 7,000 of its employees, with co-CEO Marc Benioff saying that the company had hired too many employees during the COVID-19 pandemic. The San Francisco-based company had over 73,500 employees in early 2022, which was an increase of 30 percent compared with 2021.
The layoffs will result in charges of between $1 billion and $1.4 billion as a result of employee transition, severance payments, employee benefits and share-based compensation plans.
Salesforce also plans to close several offices and sell some of its real estate, with the final closures expected to be finished in fiscal 2026.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Benioff said in a letter to employees filed with the U.S. SEC. “With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks.”
Cisco: Plans Almost 700 Layoffs
Cisco Systems on Jan. 4 filed notification with the California Worker Adjustment and Retraining Notifications (WARN) system that it is cutting 673 jobs in the San Francisco Bay Area as part of the tech giant’s previously announced plan to maximize cost savings. The California WARN Act requires covered employers to provide advance notice to employees affected by office closures or mass layoffs.
The company is eliminating 371 jobs at its San Jose location, 222 jobs in Milpitas, and 80 in San Francisco, according to the WARN notification. The majority of the layoffs that the company is planning will affect software engineers, technical engineers, hardware engineers, product managers and supervisors, the tech giant stated in three WARN letters filed with the state’s Employment Development Department.
Cisco employees affected by the cuts were notified on Dec. 12 and have the option of selecting a termination date of Feb. 1, 2023, or March 13, 2023, the notice said. “The termination will be effective on those dates or on a date within a 13-day period immediately following those dates,” Cisco said in the notice. “This action is expected to be permanent in nature.”
Amazon: Plans To Lay Off 18,000
Andy Jassy, CEO of Amazon Web Services parent company Amazon, said in a web post Jan. 5 that his company plans to lay off “just over 18,000” of the company 1.5-plus million employees, with cuts expected in the coming weeks and factoring in layoffs from November.
The majority of the cuts will be at Amazon stores and the People, Experience and Technology (PXT) organization, which is Amazon’s human resources department.
Jassy originally expected to start communicating with affected employees on Jan. 18, but instead unveiled the cuts on January 5 because the news was leaked internally.
Amazon’s senior leadership team “and I are deeply aware that these role eliminations are difficult for people, and we don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted,” Jassy said in the post. “We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support.”
Scale AI: Lays Off 20 Percent Of Employees
San Francisco-based Scale AI, which develops software to help businesses accelerate their development of AI applications, is in the process of laying off about 20 percent of its employees. CEO Alexandr Wang, in a Jan. 9 blog post, unveiled the move, and took the blame for it by saying he let the company grow too quickly.
“I take full responsibility for the decisions that have led us to this point. Over the past several years, interest from enterprises and governments in AI has grown rapidly. As a result, I made the decision to grow the team aggressively in order to take advantage of what I thought was our new normal. For a time, this seemed to prove out—we saw strong sales growth through 2021 and 2022. As a result, we increased headcount assuming the massive growth would continue. However, the macro environment has changed dramatically in recent quarters, which is something I failed to predict. Many of the industries we serve, such as e-commerce and consumer technology, have been buoyed by the pandemic and are now experiencing a painful market correction. As a result, we need to prepare ourselves for a very different economic environment,” Wang wrote.
Scale AI reportedly had about 450 employees. The company’s most recent valuation hit $7.3 billion.
Jabil: Lays Off 205 Employees
Jabil, a St. Petersburg, Fla.-based contract manufacturer which counts Apple among its biggest clients, on Jan. 10 sent two California WARN notices that it is laying off 205 of its California based employees, including 39 in its Livermore, Calif. office and 156 in its Fremont, Calif. office.
This follows moves late last year by the company to temporarily suspend some of its California employees and close some of its sites.
The company has over 250,000 employees in over 30 countries.
Informatica: Laying Off About 450
Redwood City, Calif.-based enterprise cloud data management software developer Informatica is cutting its staff by about 450 employees or about 7 percent of its workforce, according to a company Form 8-K filing with the U.S. Securities and Exchange Commission on Jan. 12. Under the cost-cutting plan, Informatica is reducing its workforce by “approximately 450 employees,” representing about 7 percent of the company’s current global workforce. Informatica currently has more than 5,500 employees worldwide.
“The plan is intended to better align the company’s global workforce and cost base with its cloud-focused strategic priorities and current business needs,” the 8-K stated.
The company said the layoffs “will be substantially complete by the end of the first quarter of 2023,” and will result in non-recurring charges of about $25 million to $35 million, mostly incurred in the first quarter.
Microsoft: Confirms Plans To Lay Off 10,000
Microsoft on Jan. 18 confirmed it will lay off 10,000 employees over the next few months. The move, which is the largest layoff round since 2014 for the world’s largest software company, amounts for under 5 percent of its worldwide employee base of about 221,000.
Microsoft CEO Satya Nadella in a blog post said the layoffs stem from a slowdown in customer demand and a potential recession ahead.
“We will align our cost structure with our revenue and where we see customer demand. Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3,” Nadella wrote.
Microsoft in July 2022 it laid off less than 1 percent of its worldwide head count, and followed that in October with a layoff of under 1,000 employees in various departments.
8x8: Will Lay Off 7 Percent Of Staff
Cloud communications provider 8x8 on Jan. 18 unveiled a workforce reduction that have already started impacting about 7 percent of its staff globally, including the Campbell, Calif.-based company’s channel leadership team.
The company said in an 8-K filing that the job cuts are part of a restructuring plan to refocus its target market and to cut costs. 8x8 has 2,216 employees, and the cuts will affect about 155 employees.
An 8x8 channel partner who spoke under the condition of anonymity told CRN that the company has let go most of its channel team. “8x8 is losing their channel religion a little bit,” the partner said.
The partner said the layoffs may be coming as the company prepares itself for acquisition. Reports surfaced last year that cloud communications competitor RingCentral was evaluating a deal to buy 8x8. RingCentral, for its part, in November revealed that it was cutting its workforce by 10 percent in light of what the company called “an increasingly difficult macro environment.”
Sophos: Plans To Lay Off Up To 10 Percent Of Workforce
Cybersecurity giant Sophos on Jan. 18 confirmed to CRN reports that the company is reducing its global workforce by up to 10 percent, citing both the current economic environment as well as plans to invest more heavily into an “as-a-service” model. On-line news site TechCrunch originally reported that Sophos is laying off about 450 employees, a figure which Sophos declined to confirm.
The company confirmed the layoff plans to CRN, following a report from TechCrunch, which said the move would affect about 450 employees. Sophos, however, did not confirm that figure.
While dozens of cybersecurity vendors have disclosed staff cutbacks since last May amid economic upheaval, the Sophos layoff is apparently one of the largest.
In its statement, Sophos blamed the cutbacks on factors including the “challenging and uncertain macro environment,” which has forced the company to reassess its growth prospects.
Intel: Laying Off Over 500 In California
Intel on Jan. 18 filed three layoff notices with the California Employment Development Department (EDD), as required by the California Worker Adjustment and Retraining Notification, or WARN, Act.
The layoffs, which total 544 employees, are part of an Intel “right-sizing” plan laid out in October to cut $3 billion in 2023 and as much as $10 billion in costs by 2025 in moves that Intel CEO Pat Gelsinger had already said would impact headcount.
Intel in an emailed statement said that the company, as discussed during its third fiscal quarter financial call, is working to accelerate its strategy while navigating a challenging macro-economic environment.
“We are focused on identifying cost reductions and efficiency gains through multiple initiatives, including some business and function-specific workforce reductions in areas across the company. We continue to invest in areas core to our business, including our U.S.-based manufacturing operations, to ensure we are well-positioned for long-term growth. These are difficult decisions, and we are committed to treating impacted employees with dignity and respect,” Intel said.
JumpCloud: Lays Off 100
Identity security firm JumpCloud has laid off 100 employees, or about 12 percent of its workforce. In an email to staff, which was posted January 18 on the company’s website, Louisville, Colorado-based JumpCloud co-founder and CEO Rajat Bhargava said the cutbacks have been made for the health of the business as revenue in the second half of 2022 grew less than forecast while expenses continued to rise.
The company’s small-to-medium-sized enterprise customers “aren’t growing as quickly as they were” previously, h Bhargava e said in additional comments posted on the JumpCloud site. “This forces us to change our business and financial model for sustained growth.”
Alphabet: Lays Off 12,000
Google parent Alphabet on Jan. 20 said it plans to lay off 12,000 employees, or about 6 percent of the company’s worldwide workforce.
“The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here,” said Alphabet CEO Sundar Pichai in an email to Google employees. “Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”
Alphabet followed up on January 23 with more details. The earliest round of the 12,000 employees to be laid off includes recruiters, software engineers, user experience (UX) professionals, and workers in the fast-growing Google Cloud.
Despite the layoffs, Alphabet still lists nearly 1,000 job openings.
PagerDuty: Plans To Lay Off 7 Percent Of Workforce
PagerDuty, a San Francisco-based cloud-based company specializing in incident response for IT departments, said on Jan. 24 that it plans to lay off 7 percent of its workforce as part of an effort to “drive efficient growth and expand operating margins,” according to a regulatory filing. The company had 950 employees as of a year ago, which would mean about 66 employees were affected by the layoffs.
PagerDuty plans to reallocate certain roles and realign teams to continue to improve operational resiliency and agility while rationalizing its real estate footprint. The company expects some roles to be eliminated while new roles will be created in high-talent, lower-cost geographies.
PagerDuty expects to incur non-recurring charges in a range of $5 million and $7 million in connection with the layoffs, mainly due to severance payments, notice pay, employee benefits contributions, and related costs. The majority of the restructuring charges will be incurred in the fourth fiscal quarter 2023.
IBM: Cuts Will Affect 1 To 1.5 Percent Of Workforce
Armonk, New York-based tech giant IBM said Jan. 25 that it would cut between 1 and 1.5 percent of its workforce, reportedly amounting to about 3,900 job cuts in total.
The layoffs are related to the Kyndryl spinoff and healthcare divestiture and not based on 2022 performance or 2023 expectations, an IBM spokesperson told CRN in an email.
The job cut revelation came the same day the company reported its fourth-quarter earnings. IBM Chief Financial Officer Jim Kavanaugh said he anticipates a $300 million charge during the first quarter due to “remaining stranded costs” – which appears to be related to the layoffs, according to Reuters. Kavanaugh told Reuters that Armonk, N.Y.-based IBM will still hire in client-facing research and development roles.
SAP: 3,000 Jobs Will Be Cut
Business application giant SAP said Jan. 26 laying off up to 3,000 employees, about 2.5 percent of its global workforce.
The job cuts were disclosed during the company’s fourth quarter/full-year 2022 financial results conference call where CEO Christian Klein said they are part of a “targeted restructuring in select areas of the company.”
The company said the savings from the cuts would be modest in 2023 and provide a savings run rate between 300 million and 350 million euros ($325 million and $380 million) in 2024.
NetApp: Laying Off 8 Percent Of Workforce
San Jose, Calif.-based NetApp said in late January that it plans to lay off about 8 percent of its global workforce.
The cloud storage and management technology developer unveiled the planned workforce reduction in a regulatory filing as part of its “planned efforts to realign resources to prioritize investments against its biggest opportunities in light of the macroeconomic challenges and reduced spending environment.”
NetApp CEO George Kurian, in an email to employees the company included as part of the SEC filing, wrote that the firm has been discussing the impact macroeconomic issues, which are driving businesses to be more conservative in their IT spending, are having on NetApp.
“We are not immune to these challenges. Against this backdrop, we must be agile, deliver on our near-term commitments, while positioning ourselves for long-term success. This means sharpening our strategy to focus on the areas of our business best positioned for growth, adapting our cost structure to reflect focus and market conditions and raising the bar on our performance. Having successfully navigated similar challenges together with you before, I am confident that sharp focus on our strategy and strong execution will enable us to capture the opportunity ahead,” Kurian wrote.