The Big Tech Companies Are Still Making Money, But Layoffs Are Hitting Hard, And Fast

Global tech giants including Microsoft and Google Amazon, SAP, and others have let off thousands of staff since the beginning of the year, from the United States to Europe and Asia.

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Despite the fact that the majority of these companies are profitable.

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According to a report by financial services firm, Jefferies, "headcount decrease is a result of overhiring during the epidemic and a weaker growth outlook than previously predicted."

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With interest rates and inflation being high, consumers are cutting down on spending amid global economic uncertainties.

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As a result, according to Jefferies analysts, organizations "need to cut personnel in order to achieve operating efficiency with a workforce that reflects current demand patterns."

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Capital has grown more expensive due to rising interest rates, and companies have begun reducing personnel costs.

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A survey from Bank of America Global Research stated that "particularly for startups, the boost in employment was partially spurred by cheap finance."

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Here are a few of the most well-known global tech giant companies that fired employees while making a lot of money.

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Microsoft

Microsoft reported a net profit of $16.4 billion for the three months that ended on December 31, an 8% decrease from the prior year. Results were driven by its cloud division, with Microsoft Cloud sales reaching $27.1 billion, up 22% from the previous year.

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Despite a "dynamic environment," the company achieved "record results" in the fiscal year 2022 which concluded on June 30. This was stated in the computer giant's annual report by CEO Satya Nadella.

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"We generated $83 billion in operating profits and $198 billion in revenue. In the fiscal year 2022 report, he said that Microsoft Cloud's yearly revenue for the first time exceeded $100 billion.

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In spite of this, Microsoft said in January that it will be cutting 10,000 employees as the company prepares for slower revenue growth.

Alphabet, the parent of Google

Alphabet, Google's parent company, announced in January that it will lay off 12,000 employees.

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The firm failed on earnings and sales in the fourth quarter but achieved a 1% year-on-year revenue increase for the December quarter.

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On the results call, CFO Ruth Porat stated that Alphabet hired 3,455 individuals during the quarter, the majority of whom were in technical jobs.

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She also told Trade Algo that the firm is significantly decreasing its recruiting rate to deliver profitable growth in the long run.

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"We've experienced times of significant development over the last two years." "We hired for a different economic reality than the one we confront now to match and fuel that growth," stated CEO Sundar Pichai in a statement to employees.

Amazon

Amazon cut off over 18,000 employees in January and plans to lay off another 9,000 in the following weeks.

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Despite exceeding experts' expectations in the fourth quarter of 2022, revenue was impressive.

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Despite net sales increasing by 9% to $149.2 billion in the quarter, operating income fell to $2.7 billion from $3.5 billion a year ago.

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Overall, 2022 was Amazon's weakest year of growth since the company went public in 1997. The e-commerce behemoth warned of recessionary pressures and a drop in consumer spending.

SAP

SAP of Germany said it reached its full-year 2022 estimate across the board, with cloud revenue growing 24% year on year. The corporate software provider also reported a 2% increase in operating profit.

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Still, SAP said in January that it will be laying off up to 3,000 employees as the business's leadership strives to steer the company toward double-digit profit growth in 2023.

Sea Group

Sea Group, located in Singapore, recorded a net income of $422.8 million in the fourth quarter of 2022, the company's first quarterly profit since its inception in 2019.

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According to media sources, the Indonesian subsidiary of Sea's e-commerce affiliate Shopee undertook a new wave of layoffs, impacting less than 500 full-time and contractual staff.

Last year, the corporation allegedly lost about 7,000 positions or roughly 10% of its staff.

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Other Asian tech companies have not been spared.

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Companies that have slashed personnel in the recent several months include Indonesia's GoTo Group, Singapore's Sea Group, Carousell, Foodpanda, and South Korea's Naver and Kakao.

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Dell

Dell reported record revenue of $102.3 billion in the fiscal year 2023, which ended on February 3, up 1% from the previous year. Operational income increased by 24% year on year to $5.77 billion.

In February, the PC manufacturer revealed intentions to lay off 5% of its staff, or 6,650 people.

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In a statement to staff, co-COO Jeff Clarke stated that the workforce decrease was done to "keep ahead of downturn implications."

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While sales for the fiscal year 2023 increased, Dell's operating income fell 26% to $1.18 billion in the fourth quarter of the fiscal year 2023 as worldwide demand for PCs and laptops slowed.

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Apple

So far, Apple has avoided widespread layoffs by hiring at a slower rate than Google, Amazon, Microsoft, and Others. Yet, the iPhone manufacturer is also seen tightening its belt. In March, the business reportedly postponed incentives for certain staff and halted recruiting. According to Bloomberg, Apple laid off contract workers in August.

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The iPhone manufacturer fell short of revenue, profit, and sales targets for key business lines in the first quarter of the fiscal year 2023, which ended Dec. 31 last year.

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CEO Tim Cook blamed it on a high currency, Chinese production difficulties, and macroeconomic challenges.

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