The tech industry’s moment of reckoning: layoffs and hiring freezes

Just days after overhauling its wireless data plans, Verizon on Wednesday held a meeting with a wide audience of customer service employees to notify them of upcoming “restructuring” and “streamlining” measures that are all but certain to result in significant layoffs. More details will be shared tomorrow, May 25th, according to a prerecorded message that employees received. Over 6,000 employees were present on today’s call — The Verge spoke with several of them — but the consolidation measures could end up impacting numbers far beyond that.

The warning comes just a month after Verizon posted Q1 ’23 earnings, which fell short of Wall Street estimates as its subscriber base continued to shrink. The company lost 127,000 postpaid subscribers in the quarter. In March, the company appointed Sowmyanarayan Sampath as CEO of Verizon Consumer Group, which oversees its customer service operation.

Meta employees are bracing for another round of layoffs. In a recording of a company meeting obtained by Vox, Meta president of global affairs Nick Clegg told employees that a “third wave is going to happen next week.”

After laying off 11,000 employees last November, Meta later announced job cuts affecting an additional 10,000 workers by the end of May. Meta started by cutting workers in recruiting roles in March and slashed an additional 4,000 jobs in its technology department in April. This latest round of layoffs is expected to affect workers in business-focused positions.

Microsoft is skipping raises for salaried employees this year. In an internal memo obtained by The Verge, Microsoft CEO Satya Nadella told employees that only hourly workers will receive raises and blamed the move on the uncertain state of the economy.

“We are clear that we are helping drive a major platform shift in this new era of AI, and doing so in a dynamic, competitive environment while also facing global macroeconomic uncertainties,” Nadella wrote. “We must maintain a leadership position in our at-scale businesses of today, generating enough yield to invest and lead in the next wave, while staying on the frontiers of both performance and efficiency.”

Robot delivery startup Nuro announced plans to layoff a portion of its workforce and to pause its commercial operations as it pivots to more research and development. The news comes amid a broader set of financial challenges for the burgeoning autonomous vehicle sector.

Nuro grew too rapidly in recent years thanks to an abundance of capital, a zero interest rate environment, and a growing sense of competition. But the company has since run into economic headwinds that are challenging the entire tech industry.

Clubhouse, the app that sparked a wave of audio-only features, is laying off over 50 percent of its employees. The app’s co-founders, Paul Davison and Rohan Seth, shared the news in a memo to employees, where they emphasize a need to “reset” the company in a post-covid era.

“As the world has opened up post-Covid, it’s become harder for many people to find their friends on Clubhouse and to fit long conversations into their daily lives,” the founders write. “To find its role in the world, the product needs to evolve. This requires a period of change.”

Dropbox is laying off around 500 employees, making up about 16 percent of the company’s entire workforce. In a memo to employees, Dropbox CEO Drew Houston attributes the layoffs to a rocky economy — but also says that the cuts will allow the company to build out its AI division.

“In an ideal world, we’d simply shift people from one team to another. And we’ve done that wherever possible,” Houston writes. “However, our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development. We’ve been bringing in great talent in these areas over the last couple years and we’ll need even more.”

Meta has started its latest round of layoffs on Wednesday, and they affect employees in technical roles, according to CNBC.

It’s unclear how many employees are being laid off in this round, but Vox reported Tuesday that the cuts would be “in the range” of 4,000 people. On LinkedIn, I found posts from people laid off in roles including senior engineering manager, user experience researcher, data scientist, technical program manager, gameplay programmer, and content designer.

Meta’s company-wide job cuts impacted the customer service team it had just started to build, leaving influencers and group admins grappling with scammers and technical difficulties, according to a report from CNBC.

CNBC says it spoke with former Meta employees and viewed documents filed with the US Department of Labor that indicate the company’s massive layoffs affected workers across Facebook and Instagram’s customer support, customer experience, and communities teams. Meta laid off 11,000 employees last November and cut an additional 10,000 workers in March.