From the collapse of one of the largest cryptocurrency exchanges (FTX) to mass layoffs by major global tech companies, 2022 has been an eventful year for the tech industry. It could aptly be described as the year of layoffs.
According to records available to Nairametrics, 861 tech companies laid off a total of 138,012 employees this year. This figure was as of November 27, 2022.
Unfortunately, the layoffs may just be getting started, according to industry analysts who have projected more jobs to be cut in the first quarter of 2023.
Nigerian tech companies have not been insulated from the headwind either. While tech layoffs have not made headlines in Nigeria, many tech companies in the country are said to be quietly cutting staff.
One of the latest Nigerian tech companies to do so is Quidax. Last week, the Nigerian cryptocurrency exchange announced that it would lay off 25% of its workforce, blaming it on the impacts of the economic downturn. This means that the company will lay off about 20 of its staff, going through 84 employees registered for the company on its LinkedIn page.
As of early September, Nigerian digital bank Kuda had also laid off 23 employees. According to the company, that number represents 5% of its 450 workers. Aside from the economic collapse, analysts believe that many tech companies overhired in the time of COVID-19 when tech revenue soared, and now is the time for an adjustment.
While the number of layoffs by tech companies currently in Nigeria may not reach the cut of the top 10 in the world, the number of companies having a staff cut is increasing by the day in the country.
Below are the top 10 layoffs announced so far this year by global tech companies:
10. Lyft (683): Ride-sharing company Lyft announced in early November that it would lay off 683 employees, representing 13% of its workforce, in an attempt to reduce operating expenses. The company described the cuts as a proactive step to ensure it “is set to accelerate execution and deliver strong business results in the fourth quarter of 2022 and 2023.”
The announcement came a few months after Lyft froze hiring, laid off about 60 people and abandoned its in-house car rental service. The hiring freeze, which went into effect in August, affected every department in the US and is expected to last into next year as the transportation services giant continues to grapple with economic unpredictability.
9. Sales force (about 1000): Enterprise software maker Salesforce also confirmed in November that it had laid off hundreds of its employees. Although the company did not disclose the exact number, reports citing sources within the company said around 1,000 employees were laid off by the company.
At the end of January this year, the company’s workforce amounted to 73,541 people. In August, Salesforce said in a presentation that headcount increased 36% last year “to meet the increased demand for services from our customers.” However, the company said the job cuts were necessary due to declining demand in some countries and industries.
8. Microsoft (about 1000): In October, Microsoft laid off approximately 1,000 employees across various divisions. The layoffs affected less than 1% of Microsoft’s total workforce of about 221,000 as of June 30.
“Like all companies, we regularly assess our business priorities and make structural adjustments accordingly. We will continue to invest in our business and hire in key growth areas over the next year,” a Microsoft spokesperson said.
7. Shopify (1000): E-commerce giant Shopify laid off roughly 1,000 workers, or about 10% of its global workforce, in July. In a memo to staff, CEO Tobi Lutke acknowledged that he had miscalculated how long the pandemic-fueled e-commerce boom would last, and amid a broader pullback in online spending, Shopify would move to eliminate some roles.
Shopify had more than 10,000 employees as of December 31, 2021, according to a securities filing.
Lutke conceded that the company also overhired, saying Shopify had bet that the ever-increasing mix of online spending over in-store commerce would “advance permanently in 5 or even 10 years,” so it hired staff to meet with what he anticipated it would be. a sustained shift to e-commerce. “Now it’s clear that the gamble didn’t pay off,” Lutke said.
6. Coin Base (1100): In June, Coinbase Global laid off about 1,100 employees as part of a cost-cutting plan. The company initially said in May that it was cutting its hiring plans, and later said it would rescind new job offers. Coinbase CEO and co-founder Brian Armstrong blamed an impending US recession and the upcoming “crypto winter” as the reasons the company is making these drastic cuts.
But he also admitted that the company has grown too fast. Coinbase went public last year, becoming the first major cryptocurrency company to do so. “While we did everything we could to get this right, in this case, it is now clear to me that we over-hired,” Armstrong said.
5. Stripe (1120): US fintech giant Stripe announced in early November that it would lay off 14% of its workforce in what it described as the “toughest turnaround” for the company. This led to the layoff of around 1,120 of the fintech company’s 8,000 employees.
Announcing the layoff in a memo posted on its website, Stripe CEO Patrick Collison said the layoff became necessary for the company to cut costs. According to him, tough economic conditions such as ‘stubborn inflation, energy shocks, higher interest rates, shrinking investment budgets and tighter start-up funding’ made the decision inevitable.
Stripe, which acquired one of Nigeria’s fintech companies, Paystack, in 2020 in a $200 million deal, said it has “overcontracted” itself for current economic realities.
4. Complement 1280: Snap, the maker of the ephemeral messaging app Snapchat, laid off 20% of its employees in August this year and discontinued at least six products. The cuts affected about 1,280 of Snap’s 6,400 employees, the company said.
Snap also shut down its division that produced exclusive short shows featuring celebrities and other influencers, as well as its social mapping app, Zenly; his music creation app, Voisey; and hardware, including his drone camera, Pixy.
Like its other tech peers, Snap hired aggressively during the pandemic. He entered March 2020 with approximately 3,427 full-time employees and ended the last quarter with 6,446, an increase of 38% over the same period last year.
3. Byju (2500): In early October, Indian edtech giant Byju’s announced it was cutting 5% of its workforce, or around 2,500 positions, across various departments and was cutting its marketing budgets to improve its finances and achieve profitability. by the end of the current fiscal year.
This was the second significant layoff for the $22 billion-valued startup in recent months. In June, he cut hundreds of jobs. The move came amid the ongoing global market downturn, which has forced many startups, including Byju’s, to postpone their plans to file an initial public offering.
2. Twitter (3,700): Shortly after closing his $44 billion purchase of Twitter at the end of October, Elon Musk announced the layoff of around 3,700 Twitter employees in what surprised many. This represented almost half of the company’s staff at the time.
Musk said there was “no choice” but to fire the employees, adding that they were offered three months’ severance. According to him, Twitter was losing more than $4 million per day due to its large workforce. However, he pointed out that all those affected by the dismissals were offered a 3-month severance pay, which is 50% higher than the legally required.
Twitter co-founder and former CEO Jack Dorsey, while apologizing to Twitter staff affected by the layoffs, also admitted to overhiring, saying it “grew the company too fast.”
1. Target (11,000): The biggest layoffs this year by a single company so far this year came from Meta, which laid off 11,000 employees in one fell swoop. Meta Meta founder Marck Zuckerberg, who confirmed the decision in early November, said this represented 13% of his staff.
Meta also announced it would reduce discretionary spending and extend its hiring freeze through the first quarter of 2023, meaning the company won’t hire until after the set period. Zuckerberg, in a message to Met staff shared on Meta Newsroom, said that in addition to layoffs, the company is taking other steps to cut costs. He hinted that the company had overinvested at the start of COVID-19 and is now making efforts to correct it.