While 2023 has just started, the economic turbulence that has carried over from 2022 is as strong as ever. We are only a few weeks into the year and there have already been some massive layoff announcements from big companies such as Amazon and Salesforce.
In 2022, more than 120 large U.S. companies conducted major rounds of layoffs, cutting nearly 125,000 employees, according to Forbes’ layoff tracker. While tech companies seemed to take the brunt of it, many startups, banks, manufacturers and online platforms also conducted mass layoffs.
The biggest came from Meta, which laid off roughly 11,000 employees in November, but the company with the most rounds of cuts was Peloton, which underwent four separate rounds of layoffs, including one that affected more than 2,800 workers.
Let’s take a look at some of the biggest layoffs so far in 2023.
Salesforce was the first big company to conduct layoffs in 2023 when they announced on January 4th that around 8,000 staff would be terminated – roughly 10% of its overall workforce. While rumors were circulating for some time that this was coming, Salesforce likely followed the unwritten rule of not firing employees before the holidays and therefore waited until the first available opportunity in 2023.
Like many other companies, Salesforce admitted that it hired too rapidly during the pandemic and these cuts were a correction.
CEO Marc Benioff took some level of responsibility in a statement: “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.”
Benioff also made the news for saying that remote workers, and specifically newer remote workers seem to not be as productive. He reported that 96 percent of the company's annual contract value (ACV) was being delivered by just 50 percent of sales account executives.
"We don't have the same level of performance and productivity that we had in 2020 before the pandemic. We do not," Benioff said during a call. "When we look at some percentage of the employees, especially some of the folks that are new employees, are just not as productive."
It isn’t clear when Amazon planned to announce their layoffs as they blamed a staff leak on having to make it public earlier than expected, however it appears that a full 18,000 employees are expected to be terminated. They raised the number from 10,000 that was announced first in November.
The company reiterated that almost all of the job cuts, that amount to the size of a medium sized town, will be corporate jobs. Hardly any hourly warehouse and delivery personnel are expected to be affected.
While Amazon announced the largest layoffs so far of this economic downturn, surprisingly 18,000 job cuts is only around 1% of the entire company’s 1.5 million employees. That’s more than the entire population of countries such as Cyprus, Bahrain, or Estonia!
Amazon as well cited the economic uncertainty and fast paced hiring of the past few years as the main reasons for cutbacks.
One of the hardest hit industries of the past year has been the cryptocurrency industry. The combination of inflated crypto prices, economic uncertainty, and the FTX collapse saga has caused crypto firms to lose billions of dollars. Even Coinbase, one of the more established players in the industry, couldn't escape layoffs and announced close to 1,000 layoffs (950) on January 10th.
This equals 20% of its entire remaining workforce, after Coinbase cut 1,100 jobs in June, 2022.
Coinbase CEO Brian Armstrong said in a statement that the cuts are necessary for Coinbase to continue. “While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount.”
Other Important Mentions:
Goldman Sachs- One of the most famous investment banking companies seems to be preparing for a possible recession as many outlets are reporting that Goldman Sachs could lay off as many as 3,200 employees in one of the biggest rounds of job cuts so far in 2023.
Twitter- After Elon Musk took over, Twitter reportedly fired around 50% of their entire staff. Twitter continued making cuts since then and reportedly laid off a few dozen foreign employees in 2023. While the exact numbers are unclear since Musk took over and made the company private, Twitter has been making the news quite frequently in regards to layoffs.
HP- Hewlett-Packard announced that it plans to cut between 4,000 to 6,000 roles over the next three years in response to poor PC sales that have declined since the sharp rise during the pandemic. The company stated that its “Future Ready Transformation Plan, estimates annualized gross run rate cost savings of at least $1.4 billion by the end of fiscal 2025, and restructuring and other charges of approximately $1.0 billion.”