Twitter, Meta, PayPal, Intel ... Major Layoffs Sweep US Big Tech Firms

Meta Announces Largest US Layoff of 11,000 Employees This Year
Stripe, the Most Expensive US Startup, Also Undergoes Massive Restructuring
Layoffs and Hiring Freezes Announced Amid Growing Recession Concerns

Mark Zuckerberg, CEO of Meta. Photo by Yonhap News

[Asia Economy Reporter Yoon Seul-gi] Major U.S. big tech companies such as Meta, Twitter, PayPal, and Intel have launched massive restructuring efforts amid concerns over an economic recession. Not only these companies but also startups and the cryptocurrency sector have begun consecutive layoffs.

According to CNBC and The Wall Street Journal (WSJ) on the 9th (local time), Mark Zuckerberg, CEO of Meta, sent a letter to employees announcing a reduction of 11,000 employees, accounting for 13% of the total 87,000 staff. This is the first large-scale restructuring in Meta's 18-year history. Measures also include downsizing office space, cutting discretionary spending, and freezing new hires until the first quarter of next year.

Mandeep Singh, an analyst at Bloomberg Intelligence, a research arm of Bloomberg News, told a media outlet that Meta is expected to save at least $3 billion to $4 billion (approximately 4.2 trillion to 5.6 trillion KRW) in operating costs through this restructuring. A Meta spokesperson did not respond to WSJ's request for comment.

Elon Musk, CEO of Tesla. Photo by Yonhap News

Not only Meta but major tech companies are facing a fierce wave of layoffs. Elon Musk, CEO of Tesla and owner of Twitter, notified about 3,700 employees, nearly half of Twitter’s workforce, of their termination on the 4th. Prior to that, on the 3rd, ride-sharing company Lyft laid off about 700 employees, accounting for 13% of its total staff.

Payment service company Stripe cut 1,000 jobs, while Amazon and Apple have halted new hiring. Stripe was valued at over 100 trillion KRW last year, making it the most valuable startup worldwide. Amazon announced on the 3rd that it would stop hiring going forward, and Apple CEO Tim Cook warned after the Q3 earnings report on the 27th of last month that the company had slowed its hiring pace.

PayPal also notified 59 headquarters employees of layoffs following disappointing performance and outlook announcements. PayPal had previously laid off 83 headquarters employees in May.

Comprehensive semiconductor company Intel announced on the 28th of last month that it plans to cut up to $10 billion (about 14 trillion KRW) in costs over three years through 2025. The industry expects Intel to prepare for large-scale layoffs involving thousands of employees. Intel’s move toward massive restructuring is attributed to worsening recent performance and concerns over the semiconductor downturn. Intel’s Q3 revenue and net profit fell 20% and 85% year-over-year, respectively, and Q4 revenue is projected to be $14 billion (about 19.9 trillion KRW).

Cloud computing service provider Salesforce also initiated large-scale layoffs. According to CNBC on the 8th, Salesforce laid off about 1,000 employees on the 7th. Earlier this year, Salesforce employed 73,541 people to meet increased customer service demand, but revised its strategy as the economy contracted due to the U.S. Federal Reserve’s interest rate hikes. The prior large-scale layoffs by competitor Microsoft (MS) also appear to have influenced this decision.

In an interview with CNBC, Salesforce explained the layoffs by stating, "We hold our sales performance and processes accountable," adding, "Unfortunately, this may result in some employees leaving the company. We will support their transition."

The situation is similar in startups and the cryptocurrency industry. According to Layoffs.fyi, which tracks layoffs in tech companies, 99,251 employees have been laid off from 743 tech companies worldwide this year alone. Delivery-focused startup Gopuff, which grew rapidly during the COVID-19 pandemic, cut 10% of its global workforce. Non-fungible token (NFT) developer Dapper Labs announced plans to restructure 22% of its staff, or 134 employees. Industry experts interpret that concerns over economic recession, interest rate hikes, and inflation are shrinking the market, ultimately leading to a wave of workforce reductions.

This content was produced with the assistance of AI translation services.