Discover the companies under the technology sector that announced layoffs last week, May 1
May 10, 2023
Shopify Inc announced a surprise first-quarter profit and plans to lay off 20% of its staff due to the failure of its order-fulfillment network and investor concerns about its capital-intensive project. The Canadian e-commerce company had to cut 10% of its workforce in July 2020. The company recently exited its logistics arm and offloaded it to freight forwarder Flexport in an all-stock deal to focus on its core business. Shopify had 11,600 employees and contractors as of Dec. 31.
According to sources, semiconductor manufacturing company Qualcomm is set to implement company-wide layoffs, which will impact 5% of its workforce. The decision is due to falling sales and a sector-wide slowdown, with the majority of cuts affecting the mobile division. The mobile division is expected to let go around 20% of its workforce, with challenges arising due to a decline in smartphone sales. In February, the company anticipated that high channel inventory levels will continue due to a fall in demand in the handset industry. These actions are being taken to reduce non-GAAP operating expenses by approximately 5%. During the quarter that concluded in December 2022, Qualcomm’s net income decreased 34% year-on-year (YoY), while sales decreased by 12% from the previous year.
IBM CEO Arvind Krishna plans to replace 7,800 non-customer facing jobs with AI or automation over the next five years as part of the company's strategy to reduce support costs. The move comes amid predictions that AI will replace 85 million jobs globally by 2025, while creating 97 million new roles that will require different skills. While some analysts view the move as a positive step towards efficiency, others caution that the actual numbers may differ from predictions and that not all jobs can be taken over by AI. Recent job cuts at IBM-owned firms, Kyndryl and RedHat, have also been attributed to cost reduction efforts.
Unity Software, a video game software developer, has announced its plans to lay off around 600 employees or 8% of its workforce. The company aims to restructure specific teams to position itself for long-term and profitable growth, and the move is the third and largest round of layoffs it has conducted in recent months. Unity Software eliminated 284 jobs in January and around 225 jobs in June last year. The company's stock is down 11% year to date, while the Nasdaq is up 15% for the same period. This development is most likely due to the company's effort to optimize its workforce amidst recent market fluctuations.
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