Discover the technology companies that announced layoffs in the month of May
Shopify Inc recently surprised investors with a profitable first quarter, but also announced plans to lay off 20% of its staff. Shopify's decision to exit its logistics arm and focus on its core business contributed to the layoffs. Shopify had aggressively expanded its order-fulfillment network, anticipating sustained demand from the pandemic. However, as the demand dynamics changed, investor concerns grew over the capital-intensive project's impact on earnings. To address this, Shopify offloaded its logistics arm to Flexport. Despite the layoffs, Shopify's stock surged about 28%, adding approximately C$22 billion ($16.20 billion) to its market valuation, reaching around C$103 billion. Shopify's successful quarter was attributed to the integration of its platform by various businesses and the introduction of new tools that encouraged customer engagement, leading to higher subscription fees. Overall, Shopify successfully shifted its investor positioning to be seen as a balanced-growth and profitable company in a short span of time.
Unity Software Inc., a San Francisco-based company, has announced its third and largest round of layoffs, affecting approximately 600 employees, which accounts for about 8% of its workforce. The decision was made due to renewed recession fears, as reported by The Wall Street Journal. Additionally, Unity plans to close around 20 of its 58 global offices in the coming years. In February, Unity's shares plummeted nearly 20% following a warning in its quarterly earnings report about the unlikely recovery of the mobile in-game ad market in 2023 due to the weaker economy. Unity stock has experienced a significant decline, down 11.5% year to date and 63% over the past 12 months, contrasting the modest gains of the S&P 500.
Qualcomm, the multinational chip manufacturer, is set to announce company-wide job cuts in its upcoming quarterly results, affecting 5% of its staff. The decision to lay off employees is primarily due to a drop in sales and the ongoing tech slowdown, which has affected the entire industry. Qualcomm has been assessing the situation and its strengths, leading to the realization that the mobile division needs to be realigned. As a result, approximately 20% of employees from the mobile division will be laid off. The decline in smartphone sales and the overall decrease in demand for mobile handsets have impacted Qualcomm's revenue and profitability. Global smartphone shipments have seen a significant decline, causing smartphone manufacturers to exercise caution. These market conditions have necessitated spending reductions and operational streamlining for Qualcomm to manage expenses effectively and focus on future growth and diversification opportunities.
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