From the collapse of one of the biggest crypto exchanges (FTX) to the mass layoffs by top global tech companies, 2022 has been quite an eventful one for the tech industry. It could aptly be described as the year of the 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 have just begun, according to industry analysts who have projected that more jobs would be slashed in Q1 2023.
Nigerian tech companies have also not been insulated from the headwind. While tech layoffs have not been making the news in Nigeria, many tech companies in the country are said to be quietly reducing their staff numbers.
One of the latest Nigerian tech companies to do so is Quidax. Last week, the Nigerian crypto exchange announced that it was laying off 25% of its workforce, blaming it on the impacts of the economic downturn. This means the company will be sacking about 20 of its staff, going by 84 employees registered for the company on its LinkedIn page.
Earlier in September, Nigerian digital bank, Kuda had also laid off 23 staff. According to the company, that number represents 5% of its 450 workers. Aside from the economic meltdown, analysts believe that many tech companies had over-hired 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 meet the cut of the top 10 in the world, the number of companies having a head 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-hailing company, Lyft, early November announced it was laying off 683 representing 13% of its workforce as it tried to reduce operating expenses. The company described the cuts as a proactive step to ensure it “is set up to accelerate execution and deliver strong business results in Q4 of 2022 and 2023.”
The announcement came a few months after Lyft established a hiring freeze, laid off about 60 people and dropped its in-house car rental service. The hiring freeze, which went into effect in August, affected all departments in the U.S. and is expected to last into next year as the ride-hail giant continues to face economic unpredictability.
9. Salesforce (around 1000): The enterprise software maker, Salesforce, also in November confirmed it laid off hundreds of its employees. Although the company did not disclose the exact figure, reports quoting sources within the company said around 1,000 employees were fired by the company.
At the end of January this year, the company’s employees figure stood at 73,541 people. In August Salesforce said in a filing that headcount rose 36% in the past year “to meet the higher demand for services from our customers.” However, the company said the staff cut was necessitated by the declining demands in some countries and industries.
8. Microsoft (around 1000): In October, Microsoft laid off roughly 1,000 employees across several divisions. The layoffs affected less than 1% of Microsoft’s total workforce of around 221,000 as of June 30.
“Like all companies, we evaluate our business priorities regularly and make structural adjustments accordingly. We will continue to invest in our business and hire in key growth areas in the year ahead,” a Microsoft spokesperson said.
7. Shopify (1,000): E-commerce giant, Shopify in July laid off roughly 1,000 workers or around 10% of its global workforce. In a memo to staff, CEO Tobi Lutke acknowledged he had misjudged how long the pandemic-driven e-commerce boom would last, and amid a broader pullback in online spending, Shopify would move to cut some roles.
Shopify had more than 10,000 employees as of Dec. 31, 2021, according to a securities filing.
Admitting that the company had also over-hired, Lutke said Shopify had bet that the increasing mix of online spending over commerce in stores would “permanently leap ahead by 5 or even 10 years,” so it staffed up to meet what it anticipated would be a sustained shift to e-commerce. “It’s now clear that bet didn’t pay off,” Lutke said.
6. Coinbase (1,100): In June, Coinbase Global laid off around 1,100 employees as part of a cost-cutting plan. The company initially said in May it was paring back its hiring plans and then later said it would rescind new job offers. Coinbase CEO and cofounder Brian Armstrong blamed an impending recession in the U.S. and an upcoming “crypto winter” as the reasons for the company to be making these drastic cuts.
But he also admitted that the company has grown too quickly. Coinbase went public last year — becoming the first major cryptocurrency company to do so. “While we tried our best to get this just right, in this case, it is now clear to me that we over-hired,” Armstrong said.
5. Stripe (1,120): United States fintech giant, Stripe, early November announced it was laying off 14% of its workforce in what it described as the ‘hardest change’ to the company. This saw about 1,120 of the fintech company’s 8,000 employees booted out.
Announcing the staff cut in a memo posted on its website, Stripe CEO Patrick Collison, said the layoff became necessary for the company to cut its costs. According to him, tough economic conditions such as ‘stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding’ made the decision unavoidable.
Stripe, which acquired one of Nigeria’s fintech companies, Paystack, in 2020 through a $200 million deal, said it has ‘overhired’ for the current economic realities.
4. Snap 1,280: Snap, the maker of the ephemeral messaging app Snapchat, August this year laid off 20% of its employees and discontinued at least six products. The cuts affected close to 1,280 of Snap’s 6,400 employees, the company said.
Snap also closed down its division that produced exclusive short shows with celebrities and other influencers, as well as its social mapping app, Zenly; its music creation app, Voisey; and hardware including its drone camera, Pixy.
Like its other tech peers, Snap hired aggressively during the pandemic. It entered March 2020 with roughly 3,427 full-time employees and ended last quarter with 6,446, a 38% increase from the same time last year.
3. Byju’s (2,500): Early October, Indian edtech giant Byju’s announced it would eliminate 5% of its workforce, or about 2,500 roles, across multiple departments and was cutting its marketing budgets as it looked to improve its finances and achieve profitability by end of the current financial year.
This came as the second significant layoff by the startup valued at $22 billion in recent months. In June, it 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 for an initial public offering.
2. Twitter (3,700): Shortly after closing his $44 billion purchase of Twitter in late October, Elon Musk announced the cutting of around 3,700 Twitter employees in what came as a shock to many. This represented nearly half of the company’s staff count at the time.
Musk said there was “no choice” but to lay off employees, adding that they were offered three months of severance. According to him, Twitter was losing over $4 million per day due to its large workforce. He, however, noted that everyone affected by the layoffs was offered 3 months of severance packages, which is 50% higher than the legally required.
Co-founder and former CEO of Twitter, Jack Dorsey, while apologizing to Twitter staff affected by the layoffs, also admitted over-hiring, saying that he “grew the company too quickly.”
1. Meta (11,000): The largest layoffs this year by a single company so far this year came from Meta which booted out 11,000 employees in one swoop. Meta Meta Founder, Marck Zuckerberg, who confirmed the decision in early November, said this represented 13% of its staff count.
Meta also announced that it would be cutting discretionary spending and extending its hiring freeze through Q1 2023, meaning that the company will not be hiring until after the stated period. Zuckerberg in a message to Met’s staff shared in the Meta Newsroom said aside from the layoffs, the company is taking some other measures to cut costs. He hinted that the company had over-invested at the start of COVID-19 and now making efforts toward correction.