Tech layoffs 2024: Flipkart, Paytm, Twitch, and more slash staff by up to 35%

Running a platform supporting 1.8 billion hours of live video monthly has massive costs, even with Amazon’s infrastructure support, company executives have suggested. Twitch has been trying to boost revenue through increased advertising, but the business remains unprofitable nearly a decade after Amazon acquired it. In fact, CEO Dan Clancy in December stated that the company is planning to pull out of South Korea.

Paytm lays off over 1000 employees

Paytm’s parent company One 97 Communications terminated over 1000 employees across departments in recent months, according to Economic Times. This accounts for over 10% of Paytm’s total staff strength, marking one of the most significant job cuts by an Indian tech company this year.

The layoffs follow Paytm’s moves to withdraw small-ticket lending services and its ‘buy now pay later’ offering. With realignment underway, further cost-reduction measures are expected in the coming months. A majority of the job cuts resulted from Paytm’s lending business, which expanded considerably in 2022. Paytm aims to cut staff costs by 10-15% this financial year through this downsizing exercise.

Flipkart could lay off 1100-1500 employees

Leading Indian e-commerce player Flipkart is contemplating laying off 5-7% of its workforce, which translates to 1100-1500 jobs, according to Economic Times. This would conclude the company’s year-long hiring freeze. Flipkart has been reducing headcount annually for two years based on employee performance.

With its current employee strength at 22,000 excluding Myntra, the planned 5-7% cut could impact approximately 1300 staff. The restructuring will be finalised next month alongside Flipkart’s 2024 roadmap. Interestingly, the layoffs won’t impact the company’s intention to delay its IPO to 2024.

At the same time Flipkart, is considering collaborations with Cleartrip, where the travel platform might see increased investment in its hotel business. The company is also set to receive $1 billion funding from Walmart, boosting its valuation and supporting plans in the long run.

Unity Software to cut 25% of workforce

Videogame software provider Unity Software announced plans to lay off about 25% of its employees globally, amounting to 1,800 jobs, a Reuters report has revealed. Unity called it the “largest workforce reduction in the company’s history”, targeting completion by end of March.

Unity’s software is used by over 1.1 million game creators every month, including developers of popular games like Pokemon Go. The deep cuts across teams and regions come after Unity’s interim CEO Jim Whitehurst initiated a “company reset” in November 2023.

With four rounds of layoffs in the past year, Unity aims to refocus on its core offerings and drive profitability through this downsizing. The decision follows Unity’s failed attempt to impose a controversial new pricing policy on game developers last year.

Humane cuts 4% of staff ahead of first product launch

AI startup Humane which is preparing to launch its first product, laid off 10 employees this week representing 4% of its staff. The cuts were described as a cost-cutting measure by the 5-year-old company, which recently told employees about lowered budgets for 2024.

Humane is set to ship its debut device in March – a $699 screenless, voice-controlled AI pin meant to replace smartphones. With over $200 million in funding from Silicon Valley heavyweights – including OpenAI CEO Sam Altman – the startup was highly anticipated. The layoffs totalling 4% of its workforce signals Humane trimming costs ahead of its first product release.

Why the wave of layoffs?

The current wave of tech sector layoffs has been largely driven by economic uncertainty and over-hiring during the pandemic boom years. When COVID-19 hit, demand skyrocketed for many digital services, fueling massive growth for tech companies. As a result, firms ramped up hiring rapidly, sometimes increasing headcounts by up to 50%. However, growth slowed in 2022 as the economic outlook worsened amid high inflation, rising interest rates, and recession fears.

With revenue and profits declining at many giants, cost-cutting became imperative. Aggressive workforce reductions helped slash operating costs and right-size inflated teams. While painful, the job cuts enabled companies to trim expenses to survive the economic slowdown.