From the collapse of one of the largest crypto exchanges (FTX) to mass layoffs at top global tech companies, the year 2022 has been quite eventful in the tech industry. It could be described as the year of layoffs.
According to data obtained by Naijaonpoint, 861 tech firms laid off a total of 138,012 employees this year. This figure was accurate as of November 27, 2022.
Unfortunately, according to industry analysts, layoffs may have only just begun, who predicts that more jobs will be cut in Q1 2023.
Nigerian technology firms have not been immune to the headwind. While tech layoffs have not made headlines in Nigeria, many tech companies are said to be quietly reducing their staff numbers.
Quidax is one of the most recent Nigerian tech companies to do so. The Nigerian crypto exchange announced last week that it was laying off 25% of its workforce, blaming the decision on the effects of the economic downturn. According to the 84 employees registered for the company on its LinkedIn page, this means the company will lay off about 20 people.
Kuda, a Nigerian digital bank, had laid off 23 employees earlier in September. That figure represents 5% of the company’s 450 employees, according to the company. Aside from the economic downturn, analysts believe that many tech companies over-hired during COVID-19, when tech revenue skyrocketed, and that now is the time to adjust.
While the number of layoffs by tech companies in Nigeria may not be among the top ten in the world, the number of companies laying off employees 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 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 the company fired around 1,000 employees.
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 declining demands in some countries and industries necessitated the staff cut.
“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.
According to a securities filing, Shopify had more than 10,000 employees as of Dec. 31, 2021.
Admitting that the company also had 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.” Hence, 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 it was paring back its hiring plans in May 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 make these drastic cuts.
But he also admitted that the company had 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): In early November, United States fintech giant, Stripe 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. He said 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 company said the cuts affected close to 1,280 of Snap’s 6,400 employees.
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): In 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 the 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 in late October, Elon Musk announced cutting 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 lost over $4 million daily due to its large workforce. He 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 confirmed the decision in early November and said this represented 13% of its staff count.
Meta also announced that it would cut discretionary spending and extend its hiring freeze through Q1 2023, meaning that the company will not be hiring until after the stated period. In a message to Met’s staff shared in the Meta Newsroom, Zuckerberg said that 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.
