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The US job market was remarkably strong, even in the face of other economic headwinds. Nevertheless, there has been an increase in mass layoffs in recent months. Some of the deepest cuts have come in the technology and media sectors, but even large companies with relatively strong balance sheets have shed hundreds of white-collar positions.
The economy added 263,000 jobs in November, down slightly from the previous month, according to the Bureau of Labor Statistics, as unemployment remained unchanged at 3.7 percent. Although prices have eased, inflation remains high and is a lingering headache for the Federal Reserve, which has been raising interest rates at the fastest pace in decades to combat it. Many experts now believe a recession is likely.
Technology firms and internet companies have produced some of the most notable layoff announcements:
Aaron Terrazas, chief economist at employment website Glassdoor, said there are currently three types of companies shedding employees: those whose debt is becoming more expensive as the Fed tightens; those who are unsure of the economic outlook; and those using the economic climate as an excuse to downsize would have fired them anyway.
“The biggest question right now is this reassessment of risk,” Terrazas said, noting that companies emerging from the pandemic will have to deal with geopolitics, employee retention, investments and the supply chain.
“Today’s business leaders have been scarred by this endless parade of risk events in recent years and they just want a year where things go according to plan – and that’s why they plan conservatively,” he said. “That’s the dynamic that we’re seeing in the economy.”
Here’s a rundown of some of the more significant layoffs, including not just tech companies, but firms in other industries as well, with the biggest tailors leading the way.
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The Seattle-based e-commerce giant first announced plans in November to cut about 10,000 jobs at the company — many in staff, equipment and retail positions — and increased that number to 18,000 this week. The drop appears to be the largest in a decade of near-constant expansion, with more than 1.5 million workers at the end of September. Amazon, like other tech companies, has experienced a hiring frenzy during the pandemic, and analysts say the layoffs mark the end of an era of industry bloat. (Amazon founder and CEO Jeff Bezos owns The Washington Post.)
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In November, the parent company of Facebook and Instagram announced plans to cut 11,000 jobs, or 13 percent of its workforce, to rein in spending and focus on transforming its advertising business. The cuts underscored a turbulent new era in Silicon Valley, whose tech giants have long been considered recession-proof. Mark Zuckerberg, the company’s founder, said that the decline in online shopping and advertising competition has led to a drop in revenue. His company has also bet heavily on creating a virtual world, often referred to as the Metaverse
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The cloud-computing giant — whose products include the popular workplace chat system Slack, as well as tools for sales, marketing and customer service — announced cost-cutting plans that include cutting 10 percent of its workforce. Salesforce has more than 79,000 employees, which means the layoffs could affect nearly 8,000 people. Co-CEO Marc Benioff said the company hired too many people when its sales soared during the pandemic. Salesforce’s most recent quarterly report showed a slowdown in its revenue growth rate.
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Shortly after Elon Musk took over the San Francisco-based social media company, he fired much of the company’s executives and laid off about half of its 7,500 employees. Hundreds more workers left the company in November after refusing to sign a commitment to work longer hours, The Post reported. The Tesla billionaire has been under extreme financial pressure since the October deal; Analysts have valued Twitter at nearly $25 billion, well below the $44 billion paid by Musk and his investors. He is expected to owe $1 billion in annual interest payments alone after taking out a large loan to pay it off. The site also saw a significant drop in ad revenue.
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In December, the investment bank cut about 1,600 employees, or 2 percent of its workforce, CNBC reported. The cuts appeared to be part of a tradition at Morgan Stanley and its peers to slash a percentage of underperforming companies at the end of the year — a practice that had been suspended during the pandemic. Since the beginning of 2020, the bank’s workforce had grown by around 34 percent, in part due to two acquisitions. According to Reuters, inflation has hampered deals and put pressure on investment banks, which a year earlier made record profits advising on mergers, acquisitions and IPOs.
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Ford turned its focus to electric vehicles and their batteries, laying off about 3,000 contract workers in August, according to the Wall Street Journal. According to the Journal, that represented a 1 percent reduction in Ford’s 183,000 workforce and mostly affected workers in the United States, Canada and India.
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Swollen by pandemic shutdowns, the food delivery company shed 1,250 jobs at the company in November, about 6 percent of its workforce. CEO Tony Xu said in a note to employees that the company’s leadership “hasn’t been as rigorous as we should have been in managing our team growth” as the company’s revenue growth has been dwarfed by operating expenses.
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The world’s second largest fashion retailer, based in Sweden, announced in November that it would cut 1,500 jobs, about 1 percent of its workforce. The move was part of a $177 million effort to cut costs amid rising inflation in Europe linked to the war in Ukraine, Reuters reported. The retailer’s woes were compounded by disappointing third-quarter results as it struggled to keep up with Inditex, which owns Zara.
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The computer giant said in November it would cut 4,000 to 6,000 employees by the end of 2025 to cut costs. The announcement came after HP reported an 11.2 percent decline in revenue in the fourth quarter compared to the same period in 2021; Total annual sales fell by 0.8 percent. The downsizing was incorporated into the company’s Future Ready Transformation plan.
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The cryptocurrency exchange said in a November blog post that it would cut 30 percent of its payroll, or 1,100 workers, to “adjust to current market conditions.” The industry experienced a dramatic downturn in 2022, wiping out billions of dollars in investments.
Kraken said it has tripled its global workforce in recent years and that the reduction will bring its headcount back to 2021 levels. “Unfortunately, negative influences on financial markets have continued and we have exhausted preferred options to adjust costs to demand,” the company wrote.
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Online payments company Stripe will cut 14 percent of its workforce. In a memo to employees in November, the company said the cuts will bring Stripe’s headcount nearly back to where it was in February, when about 1,100 employees were laid off.
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Shopify announced last summer that it would lay off 10 percent of its workforce. The company reported more than 10,000 employees at the end of 2021, meaning the layoffs are estimated to affect around 1,000 workers.
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Video-streaming company Vimeo said Wednesday it would lay off about 11 percent of its employees, or about 140 employees, “due to the uncertain economic environment.”
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