In a tightening microeconomic environment, companies worldwide have been taking cost-cutting measures. According to data by Crunchbase, as of late July, more than 32,000 workers in the US tech sector have been laid off so far in 2022.
In the first four days of this week, wearable technology company Whoop laid off 15 percent of its workforce, Shopify let go of 10 percent of its staff, and electric-truck maker Rivian Automotive reduced its headcount by 6 percent. Connected rowing company Hydrow laid off 35 percent of its workforce, and e-bike brand Rad Power dismissed 63 employees.
Challenges and uncertainty
Shopify's founder and CEO Tobias Tobi Lütke said in a note sent to employees that the company took some bets on the online boom in shopping triggered by the pandemic, but the bet clearly didn't pay off. He ordered job cuts across recruiting, support, and sales departments.
Whoop, valued at $3.6 billion almost a year ago, said the global economic outlook has become increasingly uncertain over the past few months and operating costs have significantly increased.
Rivian, on the other hand, reportedly said that though the company is financially well positioned, "to fully realise our potential, our strategy must support our sustainable growth as we ramp towards profitability". Rivian, which had over 10,000 employees globally as of December 31, 2021, had $16 billion in cash at the end of the first quarter.
Hydrow raised $55 million in March, bringing its total to nearly $270 million. The company last year recorded a 300 percent year-on-year (YoY) growth — reaching 2,00,000 users. But now, the company is parting ways with 70 of its 200 employees to “reduce overall operating costs”.
Rad Power Bikes laid off 63 employees on Thursday, citing an effort to be a more “self-sustaining business” amid the broader economic downturn.
“Over the last few months, the global economic outlook has become increasingly uncertain, and our operating costs have significantly increased. This has resulted in a team reduction which was something we worked hard to avoid but was necessary to ensure the long-term sustainability of Rad Power Bikes,” the company said.
Here are other recent big ones:
Tesla shuttered its office in San Mateo, California, on June 28 and laid off roughly 200 employees working on its autopilot driver-assistant system in a move seen as accelerating cost-cutting.
Netflix laid off roughly 300 more of its employees in June, shortly after the company laid off 150 employees in May. The streaming services company said: "While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth."
Twitter laid off 30 percent of its talent acquisition team in July 2022 following a company-wide hiring freeze announced in May 2022. However, the micro-blogging platform refused to comment on the number of employees affected.
Microsoft is expected to proceed with a small percentage of role eliminations to accommodate structural changes in the organisation, according to a Bloomberg report.
Google CEO Sundar Pichai has also announced slow hiring for 2022 and 2023 while adding that the company aims to keep a check on investments for the time being.
