Tech Company Layoffs In 2023: The Cuts Continue In Second Quarter
Despite a tight IT labor market and a large number of job openings by IT firms looking for skilled professionals, tech company layoffs continue as businesses look to optimize their cost structures or adjust their market or growth plans.
No Letup In 2023 Tech Layoffs
As the U.S. continues in a time of historically low unemployment rates, tech industry headlines 2023 are quite often focused on tech layoffs.
There are several likely explanations as to why 2023 tech layoffs are increasing. Many CEOs are citing hiring too many employees during 2021 and 2022 as demand for IT solutions exploded during the COVID-19 pandemic as a main reason for letting employees go now.
Other companies are explaining layoffs as part of a plan to reorganize to better meet customer requirements or to take better advantage of newer technologies such as the cloud.
Lenovo Chairman and CEO Yuanqing Yang, for instance, told investors earlier this year that the company is reducing operational expenses and making workforce adjustments where necessary and appropriate while investing to accelerate growth and transform the company.
Global IT services provider Kyndryl in late March told CRN that it is eliminating some roles globally to become more efficient and competitive while the company continues ongoing transformation work to streamline and simplify processes and systems and better focus its investments in areas that directly benefit customers.
CRN has compiled a list of tech companies that have laid off workers since April 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 Meta or Lyft. This list also does not include layoffs of tech staff by companies not normally considered as tech companies.
Here is a list of tech companies that have instituted layoffs so far in the second quarter of 2023. CRN will update this list on an ongoing basis.
Mark Haranas, Wade Millward, Kyle Alspach, and Dylan Martin contributed to this article.
Hyland Software Lays Off 1,000
Bill Priemer, president and CEO of content services provider Hyland Software, on April 3 said via an open letter on the Westlake, Ohio-based company’s website that it will be laying off about 1,000 employees, or about 20 percent of the workforce.
“We are restructuring our organization,” Priemer wrote. “We are removing layers of management, adjusting team sizes and reassigning responsibilities across departments and levels.”
The layoffs come in response to economic conditions, Priemer wrote.
“As you know, Hyland, like many technology companies, has been navigating the global economic situation and shifts in our market,” he wrote. “We are transforming into a cloud company, which is essential to meet the needs of our current and future customers, and advance our position in the content services space. We are evolving everything—from our software, to the way we support and deliver value to our customers, to our internal systems and processes.”
The transformation has required substantial investment in both people and systems, Priemer wrote.
“While we had planned for this investment, we did not anticipate the degree to which inflation, rising interest rates and wage increases would impact our expenses,” he wrote. “Furthermore, the challenging economic climate we currently face is prompting many organizations to pull back on their technology expenditures.”
Snyk Lays Off 128
Cybersecurity startup Snyk on April 13 unveiled a plan to lay off 128 employees, according to Israeli news site Calcalist. The move came after Boston-based Snyk in December closed a $196.5 million funding round.
Prior to the new round of layoffs, Snyk in October laid off 198 employees and in July laid off 30 employees.
In explaining the April round of layoffs, Snyk CEO Peter McKay told employees in an internal message that the company had anticipated a tough beginning for 2023 but was hoping to accelerate growth in the second half of the year, Calcalist reported. McKay also said the layoffs was an opportunity for Snyk to evolve its structure.
Ernst & Young To Lay Off 3,000 In U.S.
Global consulting firm Ernst & Young, or EY, in mid-April unveiled plans to lay off 3,000 of its U.S. employees, which represents about 5 percent of its 54,000-person workforce, according to multiple sources including CPA Practice Advisor.
The layoffs, scheduled to be done over several months, will be concentrated primarily in the company’s consulting, strategy and transactions, people advisory services and core business services.
The news of the layoffs comes a few days after EY said it no longer plans to separate its consulting and auditing practices into two stand-alone companies.
Lenovo Confirms Layoffs Coming
Lenovo in mid-April confirmed reports that it has begun laying off employees as part of a roughly $115 million cost-cutting plan in response to a major downturn in its PC business.
A Lenovo spokesperson provided the confirmation to WRAL TechWire, and referred to CEO Yuanqing Yang’s February comments about a coming “workforce adjustment” as part of a broader reduction in spending. The representative did not say how many of the company’s 75,000 employees will be impacted by the job cuts.
“Like our CEO Yuanqing Yang said at our most recent quarterly earnings announcement, we are reducing operational expenses and making workforce adjustments where necessary and appropriate. We continue to invest in the areas that accelerate the growth and the overall transformation of the company,” the spokesperson told WRAL.
F5 Lays Off 9 Percent
F5, the Seattle-based developer of security for multi-cloud environments along with technology for enabling application delivery, on April 20 told employees in a staff memo that it has cut 9 percent of its workforce, or 623 employees, amid the challenging economic environment.
“As we look at the past six months, it’s clear that rising interest rates, geopolitical events and macroeconomic uncertainty have dramatically affected our customers’ spending patterns,” F5 CEO François Locoh-Donou said in the message to staff, which was posted on the company’s website Wednesday.
In response to the uncertainty, “we must take measures to decrease our costs without jeopardizing our future growth trajectory,” Locoh-Donou wrote.
F5 also eliminated the CEO bonus for fiscal 2023, reduced executive vice president bonuses during the fiscal year by 70 percent, and reduced employee bonuses. The company also plans to consolidate office space, shift internal company events to virtual, and cut back on expense and travel budgets, Locoh-Donou wrote.
CDW Layoffs Hit Hundreds After ‘Economic Uncertainty’ Warning
IT solution provider CDW appears to be laying off hundreds of employees in the wake of an April 18 warning by the company that its first fiscal quarter 2023 revenue would fall below expectations, and that it expects “intensifying economic uncertainty” to negatively impact the U.S. IT market.
Vernon Hills, Ill.-based CDW Tuesday said it now expects first-quarter net sales of about $5.1 billion, well below analyst consensus estimates of $5.28 billion according to Seeking Alpha and significantly lower than the $5.95 billion in revenue the company reported for its fiscal first quarter 2022.
CDW, ranked No. 4 on CRN’s 2022 Solution Provider 500 list, currently has about 15,100 employees.
Several CDW employees are reporting being laid off, including one who told CRN via an unsigned email that CDW has started a wave of layoffs. The firm is offering a severance package, but laid-off employees are signing non-disclosure agreements, the employee said.
One area hit by the layoffs is the field services unit, which had some redundancies after CDW’s blockbuster $2.5 billion acquisition of Sirius, the employee said.
Several employees have also taken to LinkedIn to report being laid off.
Amazon Web Services Part Of New Amazon Plans To Lay Off 9,000
Cloud computing giant Amazon Web Services will be hit by a new round of 9,000 layoffs at Amazon, according to Amazon CEO Andy Jassy.
“I’m writing to share that we intend to eliminate about 9,000 more positions in the next few weeks—mostly in AWS, PXT, Advertising and Twitch,” said Jassy in an April 20 message to employees. “This was a difficult decision, but one that we think is best for the company long term.”
The move follows Amazon’s January plan to lay off 18,000 employees, which at the time did not significantly impact AWS.
Jassy said a “second phase” of internal business evaluations has led the company to make the decision to cut the additional 9,000 employees.
“Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago,” Jassy said. “The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we’ve made them so people had the information as soon as possible. The same is true for this note as the impacted teams are not yet finished making final decisions on precisely which roles will be impacted.”
Deloitte Laying Off Up To 1,200
Global professional services company Deloitte on April 24 confirmed to CRN that it plans to begin layoffs impacting its U.S. workforce with, according to one report, as many as 1,200 positions, or about 1.5 percent of the company’s U.S. workforce, affected, according to the Financial Times.
Deloitte’s Risk and Financial Advisory division is expected to see a larger proportion of layoffs, about 3 percent of that company’s staff, due to decreased merger and acquisition activity, according to the Financial Times and a posting on thelayoff.com.
The planned layoffs were communicated to Deloitte employees April 20.
Deloitte, in a statement not attributed to a specific executive, responded to a CRN request for further information with confirmation that layoffs are happening.
“Our US businesses continue to experience strong client demand. As growth in select practices moderates, we are taking modest personnel actions where necessary,” Deloitte said.
Red Hat: Plans To Lay Off Up To 800
Red Hat in late April followed parent company IBM in unveiling a new round of layoffs that will impact up to 800 of the Raleigh, N.C.-based company’s approximately 20,000 employees around the globe.
Red Hat CEO Matt Hicks, in a letter to employees, wrote that the company plans to reduce its employee base over several weeks, writing that the decision is “now appropriate to ensure Red Hat’s ability to compete in a new environment.”
Based on dozens of LinkedIn posts from recently laid-off Red Hat employees, the company’s layoffs include several senior and principal project managers along with top members of its customer success team.
Dropbox Laying Off 500
San Francisco-based cloud storage and file synchronization technology developer Dropbox is laying off 500 employees, or about 16 percent of the company’s global workforce, as it looks to focus on driving artificial intelligence.
“I want to recognize the impact this decision has on Dropboxers who are affected and their families, and I take full ownership of this decision and the path that led us here,” said CEO Drew Houston in an April 26 message to employees. “While our business is profitable, our growth has been slowing.”
By laying off 16 percent of its global workforce, San Francisco-based Dropbox is freeing up investment for future growth and momentum around AI, according to Houston.
In an ideal world, Houston said Dropbox would simply shift employees from one year to another. However, “our next stage of growth requires a different mix of skill sets, particularly in AI and early stage product development. We’ve been bringing in great talent in these areas over the last couple years and we’ll need even more.”
Houston also said the layoff round is due in part to an economic downturn, which has put pressure on Dropbox customers.