Meta adds to a brutal year of layoffs in tech

The job cuts in tech land are piling up, as companies that led the 10-year stock bull market adapt to a new reality.

Days after Twitter’s new boss Elon Musk slashed half his company’s workforce, Facebook parent Meta announced its most significant round of layoffs ever. Meta said on Wednesday that it’s eliminating 13% of its staff, which amounts to more than 11,000 employees.

Last month, Meta announced a second straight quarter of declining revenue and forecast another drop in the fourth quarter. Digital advertisers are cutting back on spending as rising inflation curbs consumer spending, and apps like Facebook are suffering from Apple’s iOS privacy update, which limited ad targeting.

The tech industry broadly has seen a string of layoffs in 2022 in the face of uncertain economic conditions. Here are the big ones that have been announced recently. 

Meta‘s disappointing guidance for the fourth quarter wiped out one-fourth of the company’s market cap and pushed the stock to its lowest since 2016.

The company’s Reality Labs division has lost $9.4 billion so far in this year due to CEO Mark Zuckerberg’s commitment to the metaverse.

Meta is rightsizing after expanding headcount by about 60% during the pandemic. The business has been hurt by competition from rivals such as TikTok, a broad slowdown in online ad spending and challenges from Apple’s iOS changes.

In a letter to employees, Zuckerberg said those losing their jobs will receive 16 weeks of pay plus two additional weeks for every year of service. Meta will cover health insurance for six months.

Lyft announced last week that it cut 13% of its staff, or about 700 jobs. In a letter to employees, CEO Logan Green and President John Zimmer pointed to “a probable recession sometime in the next year” and rising rideshare insurance costs.

For laid-off workers, the ride-hailing company promised 10 weeks of pay, healthcare coverage through the end of April, accelerated equity vesting for the Nov. 20 vesting date and recruiting assistance. Workers who had been there for more than four years will get an extra four weeks of pay, they added.

Online payments giant Stripe laid off roughly 14% of its staff, which amounts to about 1,100 employees last week. 

CEO Patrick Collison wrote in a memo to staff that the cuts were necessary amid rising inflation, fears of a looming recession, higher interest rates, energy shocks, tighter investment budgets and sparser startup funding. Taken together, these factors signal “that 2022 represents the beginning of a different economic climate,” he said.

Stripe said it will pay 14 weeks of severance for all departing employees, and more for those with longer tenure. It will also pay the cash equivalent of six months of existing healthcare premiums or healthcare continuation.

Stripe was valued at $95 billion last year, and reportedly lowered its internal valuation to $74 billion in July.

In June, Coinbase announced it cut 18% of full-time jobs, translating to a reduction of around 1,100 people.

Coinbase CEO Brian Armstrong pointed to a possible recession, a need to manage costs and growing “too quickly” during a bull market. 

Coinbase, which held its stock market debut, has lost over 80% of its value this year, cratering alongside cryptocurrencies.

Those laid off received a minimum of 14 weeks of severance plus an additional 2 weeks for every year of employment beyond one year. They also were offered four months of COBRA health insurance in the U.S., and four months of mental health support globally, according to the company’s announcement. 

In July, Shopify announced it laid off 1,000 workers, which equals 10% of its global employees. 

In a memo to staff, CEO Tobi Lutke acknowledged he had misjudged how long the pandemic-driven e-commerce boom would last, and said the company is being hit by a broader pullback in online spending. The company’s stock price is down 78% in 2022.

Shopify said employees who are laid off will receive 16 weeks of severance pay, plus one week for every year of tenure at the company.

Netflix announced two rounds of layoffs. In May the streaming service eliminated 150 jobs after Netflix reported its first subscriber loss in a decade. In late June Netflix announced another 300 layoffs. 

In a statement to employees the company said, “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth.” 

Netflix’s stock is down 58% this year.

In late August, Snap announced it laid off 20% of its workforce, which equates to over 1,000 employees. 

Snap CEO Evan Spiegel told employees in a memo that the company needs to restructure its business to deal with its financial challenges. He said the company’s current year-over-year revenue growth rate for the quarter of 8% “is well below what we were expecting earlier this year.”

Snap has lost 80% of its value this year.

Retail brokerage firm Robinhood cut 23% of its staff in August, after slashing 9% of its workforce in April. 

Robinhood CEO Vlad Tenev blamed “deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.”

The stock is down by more than half in 2022.

Earlier this month, Fintech company Chime laid off 12% of its workforce, or about 160 employees. 

A Chime spokesperson told CNBC that the so-called challenger bank – a fintech firm that exclusively offers banking services through websites and smartphone apps – is cutting 12% of its 1,300-person workforce. The company said that while it’s eliminating approximately 160 employees, it’s still hiring for select positions and remains “very well capitalized.”

Private investors valued Chime at $25 billion just over a year ago.