Internet companies around the world have been having a rough time. This has been echoed by the number of layoffs, hiring freeze, and halted investments to develop new products and services.
Some of the world’s most leading tech companies have been hit, including Meta which owns Facebook, Twitter, Amazon, and Microsoft.
However, you might ask, what is going on? Well, there has been a mention of inflation, the Ukraine war, and a generally weak economy – all of which have affected these companies, and others even outside the tech scope.
The pandemic also accelerated this development – and the layoffs have been more pronounced following Elon Musk’s Twitter acquisition, and the billionaire has fired more than 50 percent of the micro-blogging platform’s staff, although he has since admitted he made a mistake, and is bringing some of the fired workers back.
THIS IS A CONTINUING STORY SO WE WILL BE UPDATING IT PERIODICALLY
Overall, it can be argued that the layoffs have been motivated by revenue concerns that these companies are experiencing because advertisers are rethinking their ad expenditure. Advertisers also fear a case of a recession in an extremely uncertain macroeconomic environment.
To this end, which tech companies have fired their employees, and how many people have been affected? Well, here is a list of the organizations we have managed to round up so far:
As of today, we have learned that e-commerce giant Amazon is planning to fire 10,000 employees this week. Reportedly, some workers have been notified of this development so they can make the necessary arrangements. Amazon has also reported that it will pause on corporate hiring.
Apple, the maker of iPhones and MacBooks has also slowed down on hiring new staff, and will only fill in positions that are necessary. It has, however, not fired anyone so far.
Twitter, of course, has received more media coverage owing to its new owner, who’s the world’s richest person. Once Elon took over the platform, he fired more than 50 percent of the staff. So far, it is said that up to 5,500 workers and contractors have been let go.
Meta, which runs Facebook, Instagram, WhatsApp, and Oculus has also announced a job cut that affects 11,000 workers. The company has been having a very tough year appealing to both users and advertisers. It has also been in a platform battle with Tiktok, which it has failed to match. Meta has also failed massively to push the metaverse agenda.
Chipmaker Intel has also not been spared. Apparently, it prepping layoffs this quarter. It also plans to cut up to $10 million in operational costs. Reason? Well, the PC market has been declining across the globe, which has adversely affected Intel.
Patreon fired 17 percent of its staff (80 workers) at the start of September.
Google stopped half of its incubating projects. Some like Project Loon were disbanded in January 2021 and affected key markets such as Kenya. More recently, the workers in the incubators have been asked to find new jobs, affecting 1400 employees.
Update: Google is planning to lay off 6 percent of its workers, which translates to 10,000 employees. Reportedly, it will use a ranking system to let go of poor-performing staff.
Snapchat has since laid off 20 percent of its staff. It is also said to have canceled a lot of projects associated with the social media platform.
After firing 260 workers, Crypt.com is said to have fired 100s of other staff after August this year. In the same breath, FTX, a crypto exchange platform has since announced bankruptcy after it lost at least USD 1 billion of its clients’ money.
Auto-maker Rivian, which manufactures electric vehicles, some of which have found their way to Kenya, has since laid off 6 percent of its workers.
In mid-2022, streaming service Netflix fired 300 people. This was motivated by subscriber loss, but the company has since regained its numbers. It also has a free service in Kenya, and plans to launch ad-supported and cheaper plans to appeal to more subscribers.
Around June this year too, music streaming service Spotify also announced that it was planning to cut hiring by 25 percent. Spotify, which has since launched in Kenya, has been active in the African market and continues to experiment with new products.
On the bright side of things, TikTok appears to go in the opposite direction of layoffs. Reportedly, it plans to hire about 1000 workers in its California office in the future to monitor user data rather than an overseas team.
Kenya
So far, some tech startups in Kenya have closed shop or fired some of their staff.
Kune Food closed shop after raising tens of millions of shillings. Before it closed shop in June 2022, it already fired 70 percent of its staff.
Notify Logistics also closed its business. The firm said it failed to stay afloat due to the high costs of operations.
Last month, Sendy announced that it had halted supply services. This also came at a cost because the company was forced to let go of 20 percent of its staff. It is now focusing on fulfillment services.
Today, we have also learned that Twiga Foods is downsizing. With a workforce of 1000 employees, it is letting some of them go. Twiga will also be revising downwards some employee benefits. It further plans to make its trade development reps into agents and plans to shift operations into an agency model for the sales department.
Update: The layoffs affected 21 percent of the staff, which is about 210 employees.
Startups have been having a rough time in 2022, and according to reports, the current trends are not going away soon. It is also apparent now that VC funding has been slow across the globe. For instance, the tech sector has reported poor performance, which has in turn limited VC’s ability to raise money. The overall fallout has affected all other startups.
As said, these trends have been attributed to inflation and geopolitical conflicts. Central banks in different parts of the world have been looking everywhere to draw gradually to a close to the COVID-19 era stimulus that reportedly accelerated valuations. Some have hiked their interest rates, with notable selloffs in equity markets, even for startups. The development continues to haunt such companies to date.
The slowed investments are not expected to end anytime soon because the recovery from the economic downturn will take a long time.
