Google, Amazon, Snap announce fresh rounds of layoffs: What it means

Google

Earlier this week, Alphabet Inc-owned Google laid off some of its staff from a team that manages complaints from users of its customer services. The company claims the layoffs have not affected a significant number of employees. “The layoffs affected a small number of roles on a team of hundred,” Google spokesperson Flavia Sekles was quoted as saying by The Information.

The team at Google which underwent the layoff is known as Google Users & Products and it comes under Google units as well as other subsidiaries of Alphabet Inc. Other Alphabet Inc. companies Verily, Waymo and Google News have also downsized in recent times. 

Amazon 

The e-commerce giant Amazon has initiated job cuts in its music division. The company’s latest round of job cuts will affect employees from North America, Latin America, and Europe.

“We have been closely monitoring our organisational needs and prioritising what matters most to customers and the long-term health of our businesses,” an Amazon spokesperson said in a statement. “Some roles have been eliminated on the Amazon Music team. We will continue to invest in Amazon Music,” they added. 

The latest development comes close at the heels of Amazon’s announcement on Thursday that its cloud business was stabilising and predicted that it is expecting a rise in revenue over the holiday season. So far, downsizing at Amazon this year has affected 27,000 of its staff worldwide.

Snap 

Technology brand Snap Inc this week laid off close to 20 workers from its product team. The layoffs took place amid the company’s overall sales growth of 5 per cent YoY in its third-quarter earnings. The company registered a revenue of $1.19 billion surpassing analyst forecasts. The company said the layoffs were not related to any specific product and that they were a part of the company’s larger objective of ‘boosting decision making and minimising overhead’. The latest layoffs at Snap come after a series of high-profile exits which include its vice president of engineering, Nima Khajehnouri. 

Zillow

Popular US-based housing website Zillow has also announced that it will be laying off its staff. The company announced after releasing its third-quarter earnings. Reportedly, the company sacked around 25 of its staff across multiple teams which amounts to less than 1 per cent of its total workforce. The company reportedly said that the layoffs were part of a routine audit and restructuring of teams. 

Why are the tech companies laying off staff?

All the above-listed companies have somewhat given vague justifications for their move. However, based on our understanding the potential reasons for these could be strategic realignment – in terms of Google, quite possibly rearranging resources according to areas that are more critical to growth in future. Operational streamlining is another important area, if we look at Snap’s staff reduction from its product management teams and the exit of some of its top executives, they indicate the company’s efforts towards streamlining its operations. this could well likely be based on the rapidly shifting market dynamics or even to meet internal restructuring.

Another decisive factor could be the prevailing economic and market conditions. Although none of the above-listed companies have mentioned it, these kinds of layoffs tend to be indicative of wider economic and market conditions such as technological advancements, shifts in consumer preferences, the ever-changing need for operational efficiency, etc. Zillow has clearly indicated that their downsizing was a part of a ‘normal audit’. This is something that big corporations follow to optimise their performance and resource allocation. Also, the fact these job cuts will affect employees across multiple continents throws light on the ongoing global reassessment of workforce needs across big tech companies.

Moreover, the roles that are being axed also seem to be suggesting a strategic shift in these companies which are emphasising less on certain service areas and are more focussed on their core business priorities. It is to be noted that the latest trend is reflective of the broader overhaul or realignment that is happening across the tech industry. Experts are also seeing this as a potential shift in the tech industry’s approach to growth and resource management.