Google, Twitch, Discord Announce Massive Layoffs As Bay Area Mass Layoffs Continue

Multiple San Francisco tech firms such as Google and Discord instituted mass layoffs on Wednesday and Thursday, increasing the number of unemployed tech workers in the Bay Area in a year where the region had been projected to begin to recover.

For much of 2022 and 2023, mass layoffs, primarily in the tech industry occurred frequently in the Bay area. While there were dozens of such layoffs affecting 100 employees or more, large cuts, such as Salesforce having so many rounds of firings that they had to give up an entire office building, 12,000 at Google, and 10,000 at Meta, made headline news across the world.

Despite the heavy layoffs in the past few years, many analysts predicted that 2024 would be a calmer year. There were multiple signs of this happening, including the number of mass layoffs slowing down in second half of 2023.  Only companies that saw unusual amounts of turmoil, such as Cruise, which let go over 900 employees last month because of internal issues at the company, rather than the usual reasons surrounding the decline of tech, reconfiguring in a post-COVID world, and safety concerns of the Bay Area, had seen mass layoffs.

Analysts also called a few early mass layoffs in 2024, such as San Francisco-based gaming company Unity laying off 1,800 employees less than a week ago; an anomaly rather than a continued trend. However, hopes for a lighter layoff year in 2024 were dashed for many on Wednesday and Thursday when several tech companies announced more mass layoffs.

On Wednesday, the news of video game streaming service Twitch firing 500 workers in San Francisco broke early, with the CEO of the company confirming the leaked story in a blog post.

“As you all know, we have worked hard over the last year to run our business as sustainably as possible,” said Twitch CEO Dan Clancy. “Unfortunately, we still have work to do to rightsize our company and I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch.”

“Over the last year, we’ve been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient. Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business.  Last year we paid out over $1 billion to streamers. So while the Twitch business remains strong, for some time now the organization has been sized based upon where we optimistically expect our business to be in 3 or more years, not where we’re at today. As with many other companies in the tech space, we are now sizing our organization based upon the current scale of our business and conservative predictions of how we expect to grow in the future.”

Yesterday was a difficult day for all of us here at Twitch. I am going to go live today on /Twitch at 1pm PDT to answer any questions from the community related to the layoff, any of our recent announcements, or anything else that is top of mind.https://t.co/sfT9OwmNyw

— Daniel Clancy (@djclancy999) January 11, 2024

The Twitch firings were followed up by the disclosure of a WARN notice from Google on Thursday where it was announced that 703 jobs in the Bay Area would be eliminated. These cuts are to be in several divisions, including engineering and the Google Assistant feature. Worldwide, combined with the Bay area layoffs, the number of employees let go in total was close to 1,000.

Hours later, instant messaging and social platform Discord announced a large layoff of their own, laying off 170 workers in San Francisco, or around 17% of their workforce.

“We grew quickly and expanded our workforce even faster, increasing by 5x since 2020,” said Twitch CEO Jason Citrone in a memo. “As a result, we took on more projects and became less efficient in how we operated.

“Today we are making the unfortunate and difficult decision to reduce the size of Discord’s workforce by 17%. This means we are saying goodbye to 170 of our talented colleagues.”

The sudden and unexpected jump in tech layoffs surprised experts, who had thought that only smaller layoffs were to happen in 2024.

“We’re still optimistic of a recovery becoming more apparent later this year,” said Julie Ochs, a San Jose-based headhunter and hiring specialist, to the Globe on Thursday. “But having three major tech companies let this many people go this quickly here, you can’t call that recovery now can you?”

“We were expecting a turnaround this year, especially with AI firms growing quickly. But as today showed, you cannot rely on one area of the industry to turn around the industry either. Twitch and Discord, as well as Unity, those are all gaming related, so we might see some more big layoffs around the video game and social areas. As for Google, it sounds more like trimming the fat off of underperforming areas or how advancing technology is replacing them.”

“Things are still pointing to a better 2024, but if some more of these layoffs happen, then we are not going to see that better year we hoped for. We’ll know where we are much better in a few months, but right now, this isn’t the start we had hoped for to say the least.”

More tech layoffs are expected to be announced soon.