WSJ: Tech Layoffs Just Keep Coming - Microsoft, Snap, Zoom, Google, Amazon, eBay, etc.

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Tech Layoffs Just Keep Coming as Sector Resets for AI

By Sarah E. Needleman and Will Feuer
Feb 6, 2024
Wall Street Journal

The drumbeat of job cuts in the tech industry continued on Tuesday when DocuSign DOCU -3.03%decrease; red down pointing triangle became the latest company to announce layoffs this year, as Silicon Valley signals its intention to keep a grip on costs while pouring more cash into artificial intelligence.

Since cutting tens of thousands of workers in late 2022 and early last year, the tech industry has continued its belt-tightening after years of growth with little restraint. While the popularity of the humanlike AI chatbot ChatGPT served as a bright spot of growth, the industry has been otherwise scaling back.

In the latest wave of reductions, DocuSign said it would cut about 6% of its workforce, or 400 jobs, as the e-signature company looks to bring costs down and reverse its struggling stock price. Last week, identification-software company Okta said it was laying off 400 employees, or about 7% of its workforce. Snap and Zoom this month have also said they are cutting jobs. Google, Amazon.com and others across tech have also moved recently to cut jobs.

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The tech sector cut almost 16,000 workers last month, the most since May 2023, according to Challenger, Gray & Christmas, and was second only to the finance industry for the period.

Pandemic-fueled growth combined with low-interest rates at the time sent companies on a hiring and expansion spree. Since then, borrowing money has become more expensive.

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Some layoffs happen because of common factors such as lost business or duplication from a merger.

Last month, Microsoft said it was letting go of about 8% of its videogaming staff, or roughly 1,900 employees, mainly in response to its October acquisition of Activision Blizzard. Robotic-vacuum maker iRobot started a plan to cut 350 job cuts, representing about 31% of the company’s workforce, after its deal to be acquired by Amazon fell apart.

The online marketplace eBay said it would lay off about 1,000 employees, or 9% of its full-time workforce, as part of efforts to boost performance amid rising competition and softer consumer spending. The language-learning software company Duolingo cut 10% of its contractors and said it would use artificial intelligence to handle some content creation.

Layoffs have hit other sectors of the economy, too. UPS said it would cut 12,000 jobs amid a shipping slowdown. Cosmetics maker Estée Lauder and retailer Macy’s have also said they are reducing staff, and financial companies, including Citigroup and BlackRock, are going through their own layoffs.

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