Spotify joins Google, Intel, Microsoft, Amazon, Salesforce and other … – Morningstar


By James Rogers
Spotify has joined Google parent Alphabet, Intel, Microsoft, Coinbase, Cisco, Amazon, Salesforce, HP, Roku, Beyond Meat, Meta and Twitter in announcing major layoffs in recent months, with the streaming music service confirming plans to lay off about 600 workers
Spotify has joined Google parent Alphabet, Intel, Microsoft, Coinbase, Cisco, Amazon, Salesforce, HP, Roku, Beyond Meat, Meta and Twitter in announcing major layoffs in recent months, with the streaming music service confirming plans to lay off about 600 workers.
More than 55,000 global technology-sector employees have been laid off in the first few weeks of 2023 alone, according to data compiled by the website Layoffs.fyi.
Here’s a look at the list of big names across a number of sectors that have been cutting back their workforces.
Spotify
In a filing with the Securities and Exchange Commission, Spotify Technology (SPOT) said it is reducing its workforce by about 6%, which translates to about 588 jobs.
Bloomberg News originally reported that the streaming music service was planning job cuts. At the end of the third quarter, Spotify had 9,808 full-time employees globally.
The Stockholm-based company estimates that it will incur approximately EUR35 million to EUR45 million ($38.1 million to $48.9 million) in severance-related charges.
Now read: Spotify to lay off nearly 600 employees
The job cuts come after Spotify slowed its pace of hiring last year. Last June, Spotify CEO Daniel Ek told employees that the company would reduce its hiring by 25%, according to Bloomberg and CNBC reports. Spotify laid off at least 38 employees at its Gimlet and Parcast podcast units in October.
In recent years, Spotify has spent massive amounts on podcasts, which has weighed on the company’s margins. The podcast spending has yet to deliver profits, although last year Ek predicted a predicted a meaningful increase in profitability in the next couple of years.
In its SEC filing, Spotify said that, as part of a broader reorganization, the company’s chief content and advertising business officer, Dawn Ostroff, will depart.
Google
Google parent Alphabet Inc. (GOOGL)(GOOGL) has announced plans to cut approximately 12,000 jobs globally. In a blog post, Alphabet and Google CEO Sundar Pichai described the layoffs as "a difficult decision to set us up for the future."
"The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here," he added.
Like a number of other tech giants that have made layoffs recently, such as Microsoft Corp. (MSFT) and Meta Platforms Inc. (META), Alphabet expanded to meet demand during the pandemic era but is now confronted with a different economic situation, Pichai said. "Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today."
Now read: Google parent Alphabet planning to cut 12,000 jobs globally
At the end of September 2022, Alphabet had almost 187,000 employees, up from almost 164,000 employees at the end of March.
"As an almost 25-year-old company, we’re bound to go through difficult economic cycles," Pichai said. "These are important moments to sharpen our focus, re-engineer our cost base, and direct our talent and capital to our highest priorities."
Echoing recent comments from Microsoft, Pichai also highlighted the importance of artificial intelligence. "Being constrained in some areas allows us to bet big on others," he said. "Pivoting the company to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry."
Read: Google looks to shed 10,000 ‘poor-performing’ workers: report
The CEO said that the company is getting ready to share "some entirely new experiences" for users, developers and businesses. "We have a substantial opportunity in front of us with AI across our products and are prepared to approach it boldly and responsibly," he added.
Last year, a report in The Information said that Google was considering cutting 10,000 jobs. The company may employ a ranking system that would eliminate the lowest-ranked "poor-performing" employees, the report said.
"Earlier this year, we launched Googler Reviews and Development (GRAD) to help employee development, coaching, learning and career progression throughout the year," a Google spokesperson told MarketWatch in a statement at the time. "The new system helps establish clear expectations and provide employees with regular feedback."
Intel
Intel Corp. (INTC) is slashing hundreds of jobs in Silicon Valley. The cuts add to layoffs that began late last year as part of previously announced job cutting.
According to filings with California’s Employment Development Department, the chipmaker is is cutting 201 jobs at its offices in Santa Clara, Calif., which is home to Intel’s headquarters, effective Jan. 31. In late December Intel reported 90 job cuts, during which the company confirmed that it also has put some manufacturing employees on unpaid leave.
The tech giant is also adding to the 111 job cuts previously announced in Folsom, Calif., at a campus dedicated to research and development. There are now 176 layoffs effective Jan. 31, and an additional 167 job cuts effective March 15.
Now read: Intel cuts hundreds more jobs in California, and indicates more to come
Intel also expects more layoffs will be detailed in future filings.
In October, Intel announced plans for job cuts as it reported its third-quarter results. The chip maker said it was focused on driving $3 billion in cost reductions in 2023. "Inclusive in our efforts will be steps to optimize our headcount," Chief Executive Pat Gelsinger said during a conference call with analysts to discuss the third-quarter results.
The chipmaker had 121,000-plus employees worldwide at the end of 2021.
Microsoft
Microsoft Corp. (MSFT) joined other tech giants in the layoffs spotlight when the software maker confirmed plans to cut about 10,000 positions.
"Today, we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of [the third quarter of fiscal year 2023]," Microsoft CEO Satya Nadella wrote in a blog post on Jan. 18. "This represents less than 5 percent of our total employee base, with some notifications happening today."
Now read:Microsoft confirms plans to lay off about 10,000 workers as tech companies cut back
Microsoft, he said, is aligning its cost structure with its revenue and with where the company sees customer demand. Nadella wrote that while customers had accelerated their digital spending during the pandemic, they are now looking to "optimize" their digital spending to do more with less. "We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one," he added.
The tech giant is taking a $1.2 billion charge in the second quarter related to severance costs, changes to its hardware portfolio and costs of lease consolidation as it creates higher density across its workspaces.
Also see: More than 25,000 global tech workers laid off in the first weeks of 2023, says layoff tracking site
The layoffs did not come completely out of the blue. Earlier reports from Sky News and Bloomberg indicated that Microsoft was preparing to make cuts.
In the blog post, Nadella said that while Microsoft is eliminating roles in some areas, the company will continue to hire in key strategic areas. The CEO did not specify which areas will see hiring but did describe advances in artificial intelligence as "the next major wave of computing."
Coinbase
Coinbase Global Inc. (COIN)announced 950 job cuts in an attempt to cut costs.
"In 2022, the crypto market trended downwards along with the broader macroeconomy," said Coinbase CEO Brian Armstrong, in a message to employees on Jan. 10. "We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion."
Also read:Coinbase to cut 950 jobs and book charges of up to $163 million
The crypto exchange said it will book charges of about $149 million to $163 million for the cuts, divided between about $58 million to $68 million in cash charge relating to severance and $91 million to $95 million in stock-based compensation charges relating to the vesting of outstanding equity awards.
The job cuts follow the company’s announcement in June that it would lay off 18% of its employees.
Cisco
Cisco Systems Inc. (CSCO) has begun previously announced layoffs, cutting nearly 700 jobs in Silicon Valley in December, according to filings with the state of California in January.
The layoffs span a number of departments at the networking giant and extend across various positions, including software and hardware engineering, program management, product design and marketing. According to the state filings, the number of employees at the company’s San Jose, Calif., headquarters who are affected totals 371, while 222 jobs are being cut in nearby Milpitas and 80 are being cut in Cisco’s San Francisco office. The notices said employees were notified in early December and were given a choice of an effective termination date of either Feb. 1 or March 13.
In November, Cisco announced it was planning a "limited business restructuring" that will adjust the networking giant’s real-estate portfolio and affect about 5% of its 80,000-strong global workforce, or some 4,000 people.
Also read:Cisco layoffs begin with hundreds of job cuts in California and more expected
"This is about rebalancing across the board," said Cisco Chief Financial Officer Scott Herren at the time, adding that as many jobs will be added as reduced.
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01-23-23 0925ET
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