Due to massive revenue drops, anticipation of a recession next year, a rise in costs, a high number of $100,000+ salaries, among other factors, Silicon Valley companies including Twitter, Lyft, and Stripe have cut thousands of jobs in only the last few days.
Twitter was the most prominent company to have cut people in the last two days. Only a week after being bought by billionaire Elon Musk, the social media company announced mass layoffs on Friday. Earlier this week, the company sent staff e-mails saying that everyone would be known of their status noon on Friday. While the total number of jobs to be cut remains unknown, reports have shown that it could be anywhere from 25% to 50% of its staff. Bloomberg reported earlier this week that it would likely be 50%, resulting in 3, 700 jobs lost.
The company was widely seen as heading towards layoffs this year anyway, but Musk’s takeover, which had the billionaire take out substantive debt financing to buy the company for $44 billion, quickly led to speculation that the number of jobs lost would be even higher. Following Musk’s takeover, speculation only grew after initial firings of top executives, and numerous companies halting advertising due to claims of concern over Musk removing more Tweet restrictions and allowing things like hate speech (or all speech), to be allowed back. General Motors, Volkswagen, Mondelez, and General Mills are a few of the companies to hit the brakes on further marketing on the site in recent days.
“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists,” tweeted Musk on Friday. “Extremely messed up! They’re trying to destroy free speech in America.”
Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.
Extremely messed up! They’re trying to destroy free speech in America.
— Elon Musk (@elonmusk) November 4, 2022
Mass tech layoffs across the Bay Area, Silicon Valley
Thursday, rideshare company Lyft also announced massive layoffs, affecting 13% of their staff, or around 550 employees. In a statement, the company also announced that their first-party vehicle service business would be sold off, with the final decision happening due to worries about a recession next year and rising rideshare insurance costs.
“Despite efforts to avoid this day, we’ve made the difficult decision to lay off 13% of the team,” said Lyft in a statement on Thursday. “Additionally, we are pursuing a divestiture of our first-party vehicle service business, and in that case we do expect most of those team members will be offered roles from the acquiring company.
Many more layoffs have also occurred around the tech sector in the past few days. Financial services company Chime cut 12% of their staff, or 160 people. Employer company Opendoor cut 550 jobs, or roughly 18% of their staff. Finance tech giant Stripe said they had overhired in the first place, reducing their staff by 14%, or 1,120 people. Many other small start-ups and tech firms had other similar percentages lost, with companies losing dozens of people each across the Bay area.
Prior to the last several days, San Francisco and the rest of the Bay Area had already seen a large number of companies lay people off and shrink as they try and stabilize in the expensive region after the COVID-19 financial shockwave. Gap, Snap, Tesla and others have been among the most noteworthy names for layoffs this year. All of this is also in addition to the number of companies that cut positions following moving their headquarters out of the area in recent years, including Tesla, HP, and Oracle.
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