Twitter made headlines by cutting half its workforce. Meta slashed 13% of its staff a week later. Yet the social networking companies are far from the only businesses-and not just in tech-that have made big reductions this year.
- Employees of technology companies have been particularly at risk of layoffs due to the industry having overhired amid the economic recovery following the onset of COVID-19.
- Given low inventory, high home prices, and rising interest rates, thousands of real estate workers who were hired during the pandemic recovery are now facing layoffs as housing sales slump.
- Thanks to the pandemic recovery, investment banking firms had paused an annual tradition of cutting underperforming workers; several firms have recently resumed this practice.
Pandemic Overhiring Hits Tech Sector Hardest
Although this year’s surge in layoffs isn’t isolated to Silicon Valley, it’s rarely a good sign when several of the world’s largest companies reduce headcount all at once. Lurking behind those decisions: the ever-growing threat of recession.
Tech companies were especially prone to overhiring as the economy was recovering from the impact of the pandemic. Microsoft, Meta, and Alphabet expanded their respective staffs by upwards of 20% in the 12 months ended Sept. 30, according to Axios.
Now companies are dealing with the costs of all that hiring, and the wave of job cuts indicates that keeping payrolls low is the priority. More than 105,000 people have lost their jobs at private startups this year, and Bloomberg reported that the pace of tech layoffs is approaching early pandemic levels. Other companies that haven’t staff, including Apple and Amazon, have imposed hiring freezes.
Below are the ten U.S. tech companies that have made the largest job cuts in 2022:
- On Nov. 9, Mark Zuckerberg told to employees that Meta would be reducing its staff by approximately 13%. That amounts to more than 11,000 employees, and the company will be extending its hiring freeze through next year’s first quarter.
- Peleton has had three separate rounds of layoffs this year, the first on Feb. 8 followed by another in July, another on Aug.12, and the most recent on Oct. 6. They totaled more than 4,600 employees.
- On Nove.4, a week after Elon Musk completed his purchase of Twitter, the social networking company said it would cut 50% of its staff, or 3,700 people.
- On Oct. 26, Seagate Technology announced a restructuring plan that would include reducing its workforce by about 8%, or 3,000 employees.
- Carvana let go of 12% of its workforce, or 2,500 people, on May 10.
- Gopuff, a consumer goods and food delivery company, had four rounds of layoffs this year. The first two came on Jan. 26 and March 29 and accounted for 100 and 450 employees, respectively. The largest, at 1,500 employees, took place on July 12, followed by another 250 on Oct. 19.
- Snap let go of 20% of its workforce on Aug. 31, cutting 1,280 employees.
- Cryptocurrency exchange platform operator Coinbase laid off 18% of its staff, or 1,100 people, on June 14.
- Stripe, a financial services and software-as-a-service company, reduced its workforce twice this year. The first was minor, at just 50 people on Aug. 19, whle it laid off 14% of its staff, or 1,000 people, on Nov. 3.
- Microsoft has made several job cuts this year, though the exact numbers are difficult to track. On July 12, per CNBC, the technology corporation announced it would be laying off less than 1% of its workforce. On Oct. 17, it cut 1,000 jobs, according to Axios.
On November 3, Lyft released a note stating it will be laying off 13% of its staff, or almost 700 people.
Boom Becomes Bust for Real Estate Firms
The tech sector isn’t the only industry that’s been inundated by layoffs. Amid low inventory, high home prices, and rising interest rates, housing sales have slowed as first-time homebuyers have been pushed out of the market like never before. According to the result of a survey conducted by the National Association of Realtors (NAR), just 26% of the real estate trade association’s representative sample were first-time homebuyers, a record low, and down from 34% for the year prior.
As a result, the thousands of workers who were employed amid the pandemic recovery’s booming housing market are now facing widespread layoffs, with real estate companies warning of further cuts in the near future. In addtion, NBC News reported, industry analysts have projected that job cuts could reach levels not seen since the 2008 housing crash.
Below are ten f the largest U.S. real estate industry layoffs in 2022:
- On March 8, online mortgage origination platform Better.com laid off 3,000 employees, or roughly 35% of its workforce. Then on April 19, the company cut a further 250 jobs, followed by another 250 on Aug. 26.
- On July 12, loanDepot laid off 2,800 employees, in addition to announcing an expected further reduction of its workforce by 2,000 by the end of the year.
- Mr. Cooper, a home loan servicer, had three rounds of layoffs this year. The first was around 250 employees on April 29, followed by 420 on June 2 and another 800 on Nov. 3.
- Redfin, a residential real estate brokerage operator, laid off around 470 employees on June 14. The company reduced its workforce by a further 13%, or 862 people, on Nov. 9.
- Opendoor laid off around 550 employees, or 18% of its workforce, on Nov. 2, in addition to 830 previously removed third-party positions.
- On June 23, JPMorgan Chase, the multinational investment bank and financial services holding company, announced a round of layoffs affecting roughly 1,000 home lending employees, though almost half of them were reassigned to other divisions.
- Homepoint, a national mortgage lender, filed WARN Act notices in Arizona, Florida, Michigan, and Texas on Sept. 7 that indicated it would lay off a total of 913 workers.
- Compass cut 450 jobs, or 10% of its workforce, back in June, followed by another 271 on Sept. 21.
- On Jan. 26, Guaranteed Rate laid off 348 of its staff. It let go of a further 189 employees in a series of smaller layoffs from February to May.
- Doma, a title insurance company, laid off 15% of its workforce, or 310 employees, on May 10. It initiated a second round of layoffs on Aug. 20, cutting 250 jobs.
On Nov. 9, Juul announced its plan to layoff 30% of its workforce, or approximately 400 employees, as part of its efforts to stave off bankruptcy.
Investment Banks Start to Crack
Although far fewer investment banking businesses have cut jobs as tech or real estate companies, the industry is more used to the practice. According to CNBC, cutting underperforming workers is an annual ritual on Wall Street, that had been on hold during the recovery from the pandemic. The return of this practice suggests that, should capital markets continue to decline, tit could be the beginning of a trend.
Below are five of the largest U.S. investment banking layoffs in 2022:
- In Wells Fargo’s 3Q22 Quarterly Supplement, the multinational financial services company said that its total headcount had declined by 10,226 since the start of the year. This breaks down into 2,858 job losses by March 31, 2,903 by June 30, and 4,465 by Sept. 30, though an unknown number of these may have been voluntary departures or unrelated to any mass layoffs. In addition, Wells Fargo said in April that there would be a round of mortgage loan officer layoffs; over 2,000 jobs are expected to be cut at the start of 2023.
- On Oct. 27, Credit Suisse said it will cut 9,000 jobs by the end of 2025, with 2,700 people, or 5% of the company’s workforce, laid off in the fourth quarter. Other employees are following their respective divisions as they are acquired by Apollo Global Management or spun off into an independent bank.
- Goldman Sachs said Sept.12 that it planned to cut several hundred jobs starting on Sept. 26. The exact number of people laid off isn’t known, but according to CNBC, the expected size of the layoff was at the lower end of the firm’s traditional 1–5% range.
- On November 9, Barclays laid off a total of 200 employees across its banking and trading desks.
- Also on Nov. 9, Citigroup cut 50 trading jobs, following “dozens” of banking roles it laid off the day prior, according to Bloomberg.