Explained: With Microsoft latest to lay off staff, here's why mass firings are becoming the norm
As many as 113 companies across the world have laid off employees since the beginning of this year with Microsoft Corporation becoming the latest to do so. According to a report by Sky News, Microsoft plans to cut thousands of jobs across divisions. Citing people familiar with developments, the report added that the software giant plans to cut about five per cent of its workforce or about 11,000 roles. Microsoft's decision indicated the technology sector may continue to shed jobs.
Not just in technology, companies (some of them from India and the United States as well) in other sectors have also laid off their employees since this year started, according to data published by Layoffs.fyi
Here's a list of some of the companies:
> Go Mechanic: A car repair startup in India- Go Mechanic will layoff 70 per cent of its workforce. In a LinkedIn post, Go Mechanic's cofounder Amit Bhasin said, "We made errors in judgement as we followed growth at all costs, including in regard to financial reporting, which we deeply regret." Bhasin said the restructuring is going to be painful, adding a third-party firm will be carrying out an audit of the business.
> Unity Software: Unity Software — a video game software development company based in San Francisco, United States, said that it would lay off 284 employees. The company said that some of the employees losing their jobs might be hired for other positions if they apply for openings, the Wall Street Journal reported. Unity Software's chief executive officer (CEO) John Riccitiello told the business newspaper that the company was dealing very specifically with overlap and a handful of projects are going in the closet. In June last year, the company had cut around 225 jobs.
> ShareChat: Indian social media platform ShareChat — which is backed by Twitter, and Google, has laid off 20 per cent of its workforce because of uncertain market conditions. ShareChat has around 2,300 employees and the layoff would affect 500 people, news agency IANS reported citing other media reports. The company has announced a financial package for those affected by the layoff. "We are taking a very difficult decision today to part ways with around 20 per cent of our talented FTEs (full-time employees) to ensure the financial health and longevity of our company in the current uncertain macroeconomic environment," Ankush Sachdeva, the co-founder and CEO of the company, said in a note to the employees.
> LendingClub: San Francisco-based financial services company LendingClub announced on January 12 that it laid off 14% of its workforce, or 225 employees, expecting the job cuts to result in savings of nearly $25 million to $30 million this year. On January 25, LendingClub will report fourth quarter and full-year 2022 earnings. A report by the news agency Reuters last week said the company expects revenue to be between $260 million and $263 million and a net income in the range of $21 million and $24 million for the fourth quarter.
> Ola: As many as 200 employees from Indian multinational ridesharing company Ola were fired as part of a restructuring exercise. The layoffs constitute 10 per cent of its 2,000-strong engineer workforce "as part of a larger restructuring exercise towards its electric dream". Ola said it plans to hire 5,000 engineers as it doubles down on new engineering verticals across streams.
> Flexport: American supply chain software startup Flexport is laying off 20% of its workforce or 640 employees. A memo by co-chief executive officers (CEOs) Dave Clark and Ryan Peterson said, "We are overall in a good position but are not immune to the macroeconomic downturn that has impacted businesses around the world. Our customers have been impacted by these challenging conditions, resulting in a reduction to our volume forecasts through 2023." CNBC reported on January 11 that the memo added that lower volumes, combined with improved efficiencies as a result of new organizational and operational structures, meant it was overstaffed in a variety of roles.
> Dunzo: Quick-grocery delivery provider in India — Dunzo announced on Monday (January 16) that it has laid off three per cent of its workforce amidst cost-cutting measures. The company's co-founder and CEO Kabeer Biswas told IANS they were looking at team structures and network design to build efficiency into our teams. "We had to part ways with 3 per cent of our team strength. Whatever the numbers, these are people who chose to build their careers with Dunzo, and it is sad to have talented colleagues leave us," Biswas said.
