List of Tech Companies That Are Still Making Money but Laying Off Employees

Jakarta, Reportase – A number of giant technology companies have laid off thousands of employees since the beginning of this year. In fact, many of these listed companies are still gaining profits.

“This reduction in the number of employees is due to excessive recruitment during the pandemic. In addition, the growth process is slower than originally estimated,” wrote a report by financial services company Jefferies, citing CNBC International, Saturday (25/3/2023).

In addition, with high interest rates and inflation, consumers are holding back their spending amid global economic uncertainty.

With the increase in interest rates, company capital also becomes more expensive, which makes companies start to be tight with costs from the number of employees.

So companies need to reduce the number of employees to regain operating efficiency, with the number of employees in line with current demand trends.

“Specifically for startupsthe surge in employment was partly driven by cheap capital,” wrote the Bank of America Global Research report.

Here are some giant tech companies that have made layoffs while still making huge profits:

1.Microsoft

This multinational technology company from the United States managed to record a profit of US $ 16.4 billion for the quarter ending December 31, down 8% from last year.

The Microsoft Cloud business succeeded in driving the company’s revenue to US$ 27.1 billion, up 22% year on year (Yoy).

Even this company also managed to set a record in the 2022 fiscal year which ended on June 30.

“We reported US$198 billion in revenue and US$83 billion in operating income. and Microsoft Cloud surpassed US$100 billion in annual revenue for the first time,” CEO Satya Nadella said in its fiscal 2022 report.

Even so Microsoft announced last January they laid off 10,000 workers to prepare for slower revenue growth.

2. Alphabets

The parent company of Google as of last January will cut 12,000 workers.

The reason is that the company lost revenue and in the fourth quarter, although it managed to add 1% year on year revenue growth in the quarter ending in December.

CFO Ruth Porat said that while Alphabet added 3,455 people in the quarter, most of them were technical workers.

He also said the company is significantly slowing down its current hiring pace to generate long-term profitable growth.

“Over the past two years we have seen a period of dramatic growth. To match and drive that growth, we are hiring according to different economic realities than we currently face,” CEO Sundar Pichai said in a memo to staff.

3.Amazon

The company created by Jeff Bezos laid off more than 18,000 employees in January and will lay off another 9,000 in the coming weeks.

But the company still posted good earnings in the fourth quarter of 2022. It even beat the forecasts of many analysts.

Although net income rose 9% to US$ 149.2 billion in the quarter, operating income fell to US$ 2.7 billion, compared to last year’s US$ 3.5 billion.

Overall 2022 will be the slowest growth since going public in 1997. Even the e-commerce giant says it is bracing for recessionary pressures and falling consumer spending.

4. SAP

This German software company gets revenue from Cloud, up 24% from last year. Even the growth of operating profit also grew 2%.

But SAP announced last January it was cutting up to 3,000 of its staff, as its top leadership seeks to target double-digit profit growth by 2023.

5. SEA Group

The Singapore-based technology giant posted a net profit of US$422.8 million in the fourth quarter of 2022. This was the company’s first quarterly profit since the company started in 2019.

Days later, Shopee’s e-commerce unit in Indonesia Sea carried out a new round of layoffs, affecting less than 500 permanent and contract employees, according to media reports.

Last year, the company was reported to have cut more than 7,000 jobs or around 10% of its workforce.

In addition, several Asian technology companies that did not escape layoffs, such as GoTo Group Indonesia, Sea Group Singapore, Carousell, Foodpanda, and South Korea’s Naver and Kakao.

6. Dell

Dell posted record revenue of US$102.3 billion in the 2023 fiscal year ending February 3, up 1% from the previous year. Meanwhile, operating income also rose 24% to US$ 5.77 billion.

However, in February this computer manufacturing company announced plans to lay off 5% of its workforce or the equivalent of 6,650 workers.

7. Apples

Giant Apple is also not free from the storm of layoffs. The company looks to be planning to tighten its belt.

Where the company reportedly delayed bonuses for some employees and only made limited hiring in March. In addition, according to a Bloomberg report, Apple also let go of a number of its contract workers in August last year.

The iPhone maker lost revenue, profit and sales across several lines of business in the first quarter of its 2023 fiscal year, which ended last December.

CEO Tim Cook blamed the strong dollar, production disruptions in China and macro headwinds.

[Gambas:Video CNBC]