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In response to the rapidly changing economic situation in the past few months, Kristalina Georgieva, Managing Director, IMF, addressed the ‘darkening’ global economic outlook and indicated that there is an increasing risk of recession in the near future. In such turbulent times, companies around the world have been taking cost-cutting measures but mostly laying off employees. Even big techs, often considered safe regarding job security, have not shied away from such measures—announcing frequent layoffs or a hiring freeze.
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Recently, it was reported that Tesla laid off 229 annotation employees from its Autopilot team and shut down one of its US offices. Reports say that a regulatory filing in the state of California revealed that Tesla laid off workers from its San Mateo office that employed only 276 workers. Further, the remaining 47 employees are expected to be transferred to Tesla’s ‘Buffalo Autopilot’ office. These employees are believed to be handling moderately low-skilled, low-wage profiles such as Autopilot data labelling.
In June 2022, media reports claimed that Tesla’s CEO, Elon Musk had a “super bad feeling” about the economy and was determined to cut about 10 per cent of the company’s salaried staff. According to email exchanges, he sent out a message to Tesla’s executives that laid out his concerns and further instructions to “pause all hiring worldwide”.
In another email, Musk is believed to have instructed Tesla employees to report to offices, a shift from their work-from-home setup.
In June 2022, Variety reported that internet streaming giant, ‘Netflix’ planned to lay off 300 employees. These job cuts are expected to be across multiple business functions in the company with majority cuts expected in the U.S. This is the second round of layoffs for Netflix, following deductions of similar size in the workforce in May 2022. In the first round, Netflix laid off 150 employees, mostly in the U.S.. These cuts happened across departments and represented roughly 2% of Netflix’s U.S. workforce.
In the latest round of layoffs, the company also indicated that similar plans may be announced again in the latter half of 2022.
Micro-blogging platform, ‘Twitter’ laid off 30% of its talent acquisition team in July 2022 following a company-wide hiring freeze announced in May 2022, according to TechCrunch. A spokesperson for the platform explained that the laid off employees will receive severance packages and the remaining recruitment staff is expected to be reprioritised owing to frozen hiring.
Twitter refused to comment on the number of employees affected by the layoffs.
In July 2022, Microsoft also joined the growing list of tech firms in cost-cutting by way of layoffs. According to Bloomberg, Microsoft is expected to proceed with a small percentage of role eliminations to accommodate structural changes in the organisation. However, the firm plans to continue investing in its business and grow the overall headcount in the year ahead. The layoffs are reported to have impacted less than 1% of the total workforce at Microsoft, spread across different groups such as consulting and customer and partner solutions.
Microsoft has reportedly slowed down hiring in the Windows, Teams and Office groups.
Recent reports claim that ‘Google’ CEO, Sundar Pichai has announced slow hiring for 2022 and 2023 while adding that the company aims to keep a check on investments for the time-being. Although Google announced no plans to freeze hiring, the current economic outlook played a significant role in this decision.
Google believes that these challenges are not obstacles but opportunities to deepen the focus and invest for the long term.
‘Meta’ has reportedly instructed its team managers to weed out poor performers considering the company’s recent controversy and struggles with advertising business.