The 10 Biggest Tech Company Layoffs Of 2023 (So Far)
After a sizzling economic and IT industry recovery from the COVID-19 pandemic in 2021 and 2022, the year 2023 marked the beginning of notable layoffs among tech vendors large and small. CRN looks at the 10 biggest tech layoffs of the year so far.
Tech Layoffs In 2023
Anyone listening to tech companies’ quarterly financial analyst conference calls will inevitably hear one phrase more than any other: macroeconomic headwinds.
Macroeconomic headwinds has become the catch-all term referring to customer purchasing slowdowns, a possible recession and geopolitical issues.
The impact from macroeconomic headwinds is often cited as a key reason for a business slowdown and, increasingly, for layoffs.
According to the online layoff tracker layoffs.fyi, 810 tech companies in 2023 have laid off over 210,000 employees as of late June. That compares with 1,058 tech companies that in all of 2022 laid off just shy of 165,000 employees. That site tracks U.S.-based as well as non-U.S. tech layoffs.
CRN has also been tracking tech layoffs in 2023. This report looks at the 10 biggest tech layoffs so far in 2023. Six of the 10 companies unveiled their layoffs in January. Many of the layoffs were accompanied by plans to downsize real estate or make other reductions in expenses.
Please note that there are some big tech layoffs not covered in this report. Given CRN’s focus on the channel, it does not include consumer-facing companies like Meta or Shopify or Lyft.
3,000 Layoffs At Ernst & Young
Global consulting firm Ernst & Young, or EY, in April unveiled plans to lay off about 5 percent of its U.S. workforce, or 3,000 employees. The layoffs, scheduled to be done over several months, are concentrated primarily in the company’s consulting, strategy and transactions, people advisory services and core business services.
The news of the layoffs came just a few days after London-based EY said it no longer plans to separate its consulting and auditing practices into two standalone companies.
Up To 3,000 Layoffs At SAP
Business application giant SAP in January laid out plans to lay off up to 3,000 employees, or about 2.5 percent of its global workforce. The layoff plans were disclosed during the company’s fourth fiscal quarter and full fiscal year 2022 financial analyst conference call where CEO Christian Klein said they are part of a “targeted restructuring in select areas of the company.”
“This will impact up to 3,000 positions and will include a head-count reduction amounting to about 2.5 percent of our workforce,” Klein said on the call, according to a transcript posted on Seeking Alpha. “While we know these changes are necessary, it is never easy to make decisions that affect our colleagues in this way.”
The Walldorf, Germany-based company provided few details about where the layoffs would occur, either geographically or throughout SAP. However, the company did say the savings from the cuts would be modest in 2023 and provide a savings run rate of between 300 million and 350 million euros ($325 million and $380 million) in 2024.
3,900 Layoffs At IBM
IBM in January confirmed plans to cut between 1 percent and 1.5 percent of its global workforce. Multiple media reports put the number of laid-off workers at 3,900, or 1.5 percent of a global workforce of 260,000. The latest public employee disclosure from IBM showed about 282,000 workers at the end of 2021. Assuming the head count is closer to that total, the layoffs would number between 2,820 and 4,230 employees.
An IBM spokesperson told CRN that the layoffs are related to IBM’s Kyndryl spinoff and health-care divestiture and not based on 2022 performance or 2023 expectations. However, the Armonk, N.Y.-based company said at the time it was still hiring in client-facing research and development roles.
6,650 Layoffs At Dell
Dell Technologies in February unveiled plans to lay off an estimated 6,650 employees. Dell Vice Chairman and Co-COO Jeff Clarke wrote about the layoffs in a memo in which he said that while the organization tried to pause hiring, reduce travel and eliminate expenses, those methods failed to turn back losses.
“The steps we’ve taken to stay ahead of downturn impacts, which enabled several strong quarters in a row, are no longer enough. We now have to make additional decisions to prepare for the road ahead,” Clarke wrote.
Dell’s cuts hit 5 percent of the 133,000-person workforce, or an estimated 6,650 employees.
Up to 7,000 Layoffs At Salesforce
Salesforce in early January unveiled plans to lay off around 7,000 employees. SalesforceCEO Marc Benioff blamed overenthusiastic hiring during the COVID-19 pandemic for the layoffs in a letter to employees filed with the U.S. Securities and Exchange Commission.
“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” wrote Benioff. “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions. With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks.”
The San Francisco-based company had over 73,500 employees in early 2022, which was an increase of 30 percent compared with 2021.
Salesforce said it expects between $1 billion and $1.4 billion in charges due to employee layoffs, including employee transition, severance payments, employee benefits and share-based compensation plans.
More than half of Salesforce employees are based in the U.S.
In addition to the massive layoffs, Salesforce said in a separate SEC filing that it will “select real estate exits and office space reductions” within certain markets. These office closures are expected to be fully complete in fiscal year 2026, Salesforce said. The overall goal of the office closures and the employee cuts is to reduce operating costs, improve operating margins and continue advancing the commitment to profitable growth.
9,000 Layoffs At AWS, Other Amazon Units
Amazon Web Services in March said it would lay off about 9,000 employees. That round of layoffs is in addition to the massive layoff parent company Amazon is also going through. (More about the Amazon layoff later.)
“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 Amazon CEO Andy Jassy in a message to employees. “This was a difficult decision, but one that we think is best for the company long term.”
Jassy said a “second phase” of internal business evaluations drove 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.”
Jassy did not specify exactly how many of the 9,000 layoffs would come specifically from Seattle-based AWS.
Jassy, who was previously CEO of AWS before becoming Amazon’s CEO 2021, said he’s still optimistic about AWS’ future even with the cuts.
“I remain very optimistic about the future and the myriad of opportunities we have, both in our largest businesses, Stores and AWS, and our newer customer experiences and businesses in which we’re investing,” said Jassy.
10,000 Layoffs At Microsoft
Microsoft in January confirmed plans to lay off 10,000 employees over the space of a few months. The move, which is the largest layoff round since 2014 for the world’s largest software company, follows a head-count reduction in October 2022 of less than 1,000 employees in various departments and a reduction in July 2022 of less than 1 percent of its worldwide head count.
Microsoft Chairman and CEO Satya Nadella told employees in a blog post at the time that Microsoft planned to lay off less than 5 percent of its global employee base due to a slowdown in customer demand and the potential for an upcoming recession.
“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,” wrote Nadella. “This represents less than 5 percent of our total employee base, with some notifications happening today.”
Nadella wrote that while Redmond, Wash.-based Microsoft is eliminating roles in some areas, it will continue to hire in “key strategic areas,” although he did not specify them.
A view of the Googleplex
12,000 Layoffs At Alphabet
Google parent company Alphabet in January said it would lay off 12,000 employees starting with recruiters, software engineers, user experience (UX) professionals, and workers at fast-growing Google Cloud, widely regarded as the No. 3 cloud offering after Amazon Web Services and Microsoft Azure. The 12,000 employees represent about 6 percent of Mountain View, Calif.-based Alphabet’s workforce.
Alphabet CEO Sundar Pichai said he remains confident about “future growth” given the opportunities ahead and the company’s “early investments” in artificial intelligence.
“I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI,” Pichai said. “To fully capture it, we’ll need to make tough choices. So, we’ve undertaken a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company. The roles we’re eliminating reflect the outcome of that review. They cut across Alphabet, product areas, functions, levels and regions.”
The Amazon Spheres
18,000 Layoffs At Amazon
Amazon in January revealed plans to lay off just over 18,000 employees, which includes layoffs that were announced the previous November.
In a post on Seattle-based Amazon’s website, CEO Andy Jassy said that the majority of the cuts will be at Amazon stores and the People, Experience and Technology (PXT) organization—Amazon’s human resources department. The company had over 1.5 million employees as of September.
“[We] 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.”
Amazon in November reduced head count in its devices and books businesses and made a “voluntary reduction offer” for employees in the PXT organization, Jassy said.
The job cuts come after Amazon executives told investors about customers “cutting their budgets and trying to save money in the short run” during the company’s October 2022 quarterly financial analyst call.
19,000 Layoffs At Accenture
Dublin, Ireland-based global services provider Accenture in March unveiled plans to lay off 19,000 employees over the next 18 months. The move by Accenture, ranked No. 1 on the CRN 2023 Solution Provider 500, came after a year in which it made 25 acquisitions and increased its head count by 39,000.
The layoffs, focused primarily on the back-office side, are coming even as the company continues to hire employees, the company said in an SEC filing.
“While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs. Over the next 18 months, these actions are expected to result in the departure of approximately 19,000 people (or 2.5 percent of our current workforce), and we expect over half of these departures will consist of people in our non-billable corporate functions,” Accenture wrote.
The cuts also come after a massive acquisition spree. Accenture in 2022 made 25 acquisitions worldwide, including Barcelona-based Alfa Consulting, Argentina-based Ergo, Brussels-based Greenfish and Minnesota-based The Stable.