Discover the companies that laid off the most employees last week, May 1
May 11, 2023
Morgan Stanley (MS.N), the investment bank, has announced plans to lay off approximately 3,000 employees in the second quarter, marking its second round of job cuts in six months. The decision comes as a result of slow dealmaking and a challenging economic environment, which have led the bank to reevaluate its headcount. The investment banking unit's declining fees and a 2% decrease in total revenue to $14.5 billion further contributed to the need for cost reduction. Additionally, Morgan Stanley's focus on expense management is driven by market uncertainty and elevated inflation. The downturn in deals, cautious investor sentiment towards volatile markets, and rising interest rates have negatively impacted Wall Street's investment banks. Consequently, this has led to a decrease in initial public offerings and a significant decline in M&A volumes, which nearly halved in the first quarter compared to the previous year. Morgan Stanley, with over 82,000 employees as of March, will lay off approximately 4% of its workforce due to these circumstances.
IBM plans to replace 7,800 non-customer facing jobs with AI or automation over the next five years, as part of a wider strategy to cut down hiring for roles that could be automated. This move has been seen as a good workforce strategy, with analysts suggesting that it is high time mundane tasks are replaced with AI. IBM's CEO, Arvind Krishna, has given examples of roles that are likely to be impacted, such as employee verification or moving employees from one department to another. The layoffs come as large technology companies, such as IBM, have continued to reduce their headcount in search of efficiency and cost reduction, following a reduction in revenue after they went on a hiring binge during the pandemic.
Qualcomm, the global chip manufacturer, has announced plans to cut 5% of its workforce, impacting approximately 2,550 employees. The decision comes in response to a drop in sales and the ongoing technology slowdown. Most of the job cuts are expected to occur in Qualcomm's mobile division, as the company aims to realign and adjust its resources to better match the current market situation. These measures follow a decline in smartphone sales, with Qualcomm's net income and revenue experiencing significant YoY decreases. With the smartphone industry facing challenges and further declines predicted in global smartphone shipments, Qualcomm is actively streamlining operations and reducing costs to navigate the technology slowdown.
Shopify Inc, a Canadian e-commerce company, announced a surprise first-quarter profit but also plans to lay off 20% of its staff due to the failed expectation of a pandemic-fueled demand boom that had led Shopify to aggressively build out an order-fulfillment network in recent years. This led to investor scrutiny of the capital-intensive project, resulting in Shopify cutting 10% of its workforce in July 2020. Additionally, Shopify exited its logistics arm by offloading it to freight forwarder Flexport in an all-stock deal, allowing them to have a logistics business that makes them competitive with Amazon without managing a business that is not core to Shopify and had been losing money.
Republic First Bancorp has announced that it laid off employees in its commercial lending unit as it plans to exit its mortgage origination business due to the high costs of running the platform that did not allow it to improve its profitability and focus on core businesses. The layoffs will affect employees of its lending and credit teams in New York. Recently, deposit balances at Republic First fell 2.7% in the first quarter, and after two regional lenders collapsed in March, deposits at regional banks have come under investor scrutiny. However, Republic First reported that its deposits grew between March 31 and April 30.
Unity Software has announced a plan to cut 600 jobs, or 8% of its workforce, in order to restructure "specific teams" and position the company for long-term growth. The layoffs are the third and largest round of job cuts in recent months for the video game software developer, which eliminated 284 jobs in January and around 225 jobs in June of last year. Unity went public in 2020 and had initially been valued at $13.7 billion but has since seen its stock drop significantly to around $25 as of Wednesday. While Unity declined to provide further details, it seems that the layoffs are aimed at streamlining operations and optimizing profitability.
Twist Bioscience, a synthetic DNA provider, recently reported a strong quarter with record revenue of $60.2 million in the second quarter of fiscal 2023, an increase of 25% compared to the same period last year. However, as part of their initiative to accelerate their path to profitability and streamline their business, Twist is resizing teams throughout the organization and reducing its workforce by approximately 270 employees, or about 25%. This is mainly due to manufacturing for the majority of synthetic biology products transitioning to the Factory of the Future, reducing overall fixed costs and removing duplication between sites. Additionally, Twist plans to focus resources on programs where they have a clear competitive advantage and see the greatest potential for long-term profitable growth and value creation. The biopharma team has been resized to focus on revenue-generating partnerships, and Twist will moderate its investment in DNA data storage while maintaining its competitive lead.
The numbers presented are derived from the statements released by the respective companies.
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