You probably didn’t miss that many large tech companies are currently reorganizing. One reorganization after another is being announced. One layoff after another is announced this week. PayPal, Workday, Hubspot, Splunk, NetApp, Pinterest, Rivian, OpenText and Micro Focus, among others, are cutting staff.
You would almost think that things are going tremendously bad in the IT industry as a whole, but nothing could be further from the truth. There are always exceptions, of course, but in general most IT companies are growing. In addition, many large IT organizations also see considerable opportunity to continue that growth.
The business community has become much more focused on innovation since the COVID pandemic. How to automate business processes in your company, how to work more efficiently, how to put data at the center of your strategy, and we could go on and on.
The main reason for organizations to put on the brakes now seems to be, on the one hand, the economic outlook. The war in Ukraine, high inflation and high energy prices. On the other hand, we also see that many organizations have been overhiring during COVID. They hired many more people than they actually needed. They were afraid that the growing demand for their solutions and the fact that people had to work from home could lead to problems. Less productivity, more demand and then a huge shortage of people.
Since that hasn’t been much of a problem at all, and we are now slowly returning to the situation before COVID, organizations see quite a few employees who are redundant. Those are being cut now. Organizations probably also see it as an opportunity to optimize positions and margins.
Where and how many?
What does that mean in numbers for this week. At PayPal, 2,000 people have to leave (7% of the workforce). Workday has decided to say goodbye to about 525 people (3% of the total). Hubspot is also moving on with around 500 people less, representing 7% of their employee base. NetApp has announced that there is no future for 960 people (8% of total) within the organization. Splunk is losing 325 jobs (4%) and Rivian is losing 860 jobs (6%). At SAP they are cutting back a bit more with 3000 people leaving (2.5%). At Pinterest they are cutting back a bit as well, 150 people (5%).
OpenText recently acquired Micro Focus for 6 billion euros and they now have a lot of duplicate functions, so they are now also saying goodbye to the staff that has more or less become redundant. A total of 2,000 jobs (8%) is disappearing.