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Wave Of Layoffs Hit The Tech Industry - CRN In Depth
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On this episode of CRN In Depth, Wade Millward discusses the wave of layoffs ripping through the tech industry and the impact on the channel.
2023: The Tech Layoffs Continue
2022 became known as the year in which dozens of tech companies began to lay off thousands of employees even as many businesses have found it hard to attract qualified IT personnel. And 2023 seems to be following the same pattern, with a variety of tech companies cutting their workforces.
The official unemployment rate for the U.S. as of December 2022 is 3.5 percent, which matches the 10-year low reached in February of 2020, just before the COVID-19 pandemic began. More tellingly, the tech industry unemployment rate is just under 2.0 percent as of December, according to CompTIA. However, CompTIA also reported that tech job postings fell from their peak of almost 400,000 in January 2022 to about 250,000 in December.
While layoffs can be hard on those who receive the pink slips, not all is doom and gloom. In the tech industry, companies, at least the larger ones, typically offer severance packages which include several weeks to months of pay along with several months of paid insurance and help finding new jobs.
In addition, those workers may not be unemployed for very long, as many companies not considered “tech companies” in the traditional sense depend on growing their IT capabilities in order to meet their customers’ needs.
The Los Angeles Times Wednesday reported that that the burst of the dot-com bubble in the early 2000s led to a wave of experienced tech personnel, particularly software engineers, entering the job market and helping fuel a new wave of IT spending. That could happen again, with newly-freed tech personnel now able to move to smaller tech companies with more flexibility, and to other companies looking to expand their IT capabilities.
CRN has compiled a list of tech companies that have laid off workers since Jan. 1 of this year. Note that this list of tech layoffs is focused primarily on companies with a major focus on the B2B IT sector, and does not include layoffs at consumer-focused companies such as Spotify. Nor does it include tech layoffs by companies not normally considered as tech companies but which may have laid off some of its IT employees.
Click through the slideshow to see the list of tech companies that have instituted layoffs so far in the first quarter of 2023. CRN will update this list on an ongoing basis.
Salesforce: Plans To Lay Off 7,000
Cloud-based software developer Salesforce on Jan. 3 unveiled plans to lay off about 7,000 of its employees, with co-CEO Marc Benioff saying that the company had hired too many employees during the COVID-19 pandemic. The San Francisco-based company had over 73,500 employees in early 2022, which was an increase of 30 percent compared with 2021.
The layoffs will result in charges of between $1 billion and $1.4 billion as a result of employee transition, severance payments, employee benefits and share-based compensation plans.
Salesforce also plans to close several offices and sell some of its real estate, with the final closures expected to be finished in fiscal 2026.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Benioff said in a letter to employees filed with the U.S. SEC. “With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks.”
Cisco: Plans Almost 700 Layoffs
Cisco Systems on Jan. 4 filed notification with the California Worker Adjustment and Retraining Notifications (WARN) system that it is cutting 673 jobs in the San Francisco Bay Area as part of the tech giant’s previously announced plan to maximize cost savings. The California WARN Act requires covered employers to provide advance notice to employees affected by office closures or mass layoffs.
The company is eliminating 371 jobs at its San Jose location, 222 jobs in Milpitas, and 80 in San Francisco, according to the WARN notification. The majority of the layoffs that the company is planning will affect software engineers, technical engineers, hardware engineers, product managers and supervisors, the tech giant stated in three WARN letters filed with the state’s Employment Development Department.
Cisco employees affected by the cuts were notified on Dec. 12 and have the option of selecting a termination date of Feb. 1, 2023, or March 13, 2023, the notice said. “The termination will be effective on those dates or on a date within a 13-day period immediately following those dates,” Cisco said in the notice. “This action is expected to be permanent in nature.”
2023: The Tech Layoffs Continue
2022 became known as the year in which dozens of tech companies began to lay off thousands of employees even as many businesses have found it hard to attract qualified IT personnel. And 2023 seems to be following the same pattern, with a variety of tech companies cutting their workforces.
The official unemployment rate for the U.S. as of December 2022 is 3.5 percent, which matches the 10-year low reached in February of 2020, just before the COVID-19 pandemic began. More tellingly, the tech industry unemployment rate is just under 2.0 percent as of December, according to CompTIA. However, CompTIA also reported that tech job postings fell from their peak of almost 400,000 in January 2022 to about 250,000 in December.
While layoffs can be hard on those who receive the pink slips, not all is doom and gloom. In the tech industry, companies, at least the larger ones, typically offer severance packages which include several weeks to months of pay along with several months of paid insurance and help finding new jobs.
In addition, those workers may not be unemployed for very long, as many companies not considered “tech companies” in the traditional sense depend on growing their IT capabilities in order to meet their customers’ needs.
The Los Angeles Times Wednesday reported that that the burst of the dot-com bubble in the early 2000s led to a wave of experienced tech personnel, particularly software engineers, entering the job market and helping fuel a new wave of IT spending. That could happen again, with newly-freed tech personnel now able to move to smaller tech companies with more flexibility, and to other companies looking to expand their IT capabilities.
CRN has compiled a list of tech companies that have laid off workers since Jan. 1 of this year. Note that this list of tech layoffs is focused primarily on companies with a major focus on the B2B IT sector, and does not include layoffs at consumer-focused companies such as Spotify. Nor does it include tech layoffs by companies not normally considered as tech companies but which may have laid off some of its IT employees.
Click through the slideshow to see the list of tech companies that have instituted layoffs so far in the first quarter of 2023. CRN will update this list on an ongoing basis.
Salesforce: Plans To Lay Off 7,000
Cloud-based software developer Salesforce on Jan. 3 unveiled plans to lay off about 7,000 of its employees, with co-CEO Marc Benioff saying that the company had hired too many employees during the COVID-19 pandemic. The San Francisco-based company had over 73,500 employees in early 2022, which was an increase of 30 percent compared with 2021.
The layoffs will result in charges of between $1 billion and $1.4 billion as a result of employee transition, severance payments, employee benefits and share-based compensation plans.
Salesforce also plans to close several offices and sell some of its real estate, with the final closures expected to be finished in fiscal 2026.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Benioff said in a letter to employees filed with the U.S. SEC. “With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks.”
Cisco: Plans Almost 700 Layoffs
Cisco Systems on Jan. 4 filed notification with the California Worker Adjustment and Retraining Notifications (WARN) system that it is cutting 673 jobs in the San Francisco Bay Area as part of the tech giant’s previously announced plan to maximize cost savings. The California WARN Act requires covered employers to provide advance notice to employees affected by office closures or mass layoffs.
The company is eliminating 371 jobs at its San Jose location, 222 jobs in Milpitas, and 80 in San Francisco, according to the WARN notification. The majority of the layoffs that the company is planning will affect software engineers, technical engineers, hardware engineers, product managers and supervisors, the tech giant stated in three WARN letters filed with the state’s Employment Development Department.
Cisco employees affected by the cuts were notified on Dec. 12 and have the option of selecting a termination date of Feb. 1, 2023, or March 13, 2023, the notice said. “The termination will be effective on those dates or on a date within a 13-day period immediately following those dates,” Cisco said in the notice. “This action is expected to be permanent in nature.”
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