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Tag: job cuts

  • Disney to lay off 7,000 jobs as streaming usage declines

    Disney to lay off 7,000 jobs as streaming usage declines

    7,000 jobs will be eliminated, according to Disney CEO Bob Iger, as part of a significant restructuring of the entertainment juggernaut.


    The layoffs are a part of a strategy to save $5.5 billion and turn Disney+ into a profitable streaming service after it reported its first subscriber decline since 2019.

    In his own words, Mr. Iger “did not make this decision lightly.”

    Additionally, he presented the first set of financial figures since his return to the organisation in November, which showed Disney+’s ongoing losses.

    “I have enormous respect and appreciation for the talent and dedication of our employees around the world,” Mr. Iger said in a statement announcing the job cuts. “And I’m mindful of the personal impact of these changes.”

    He said the changes would “better position us to weather future disruption and global economic challenges”.

    The job cuts amount to around 3.6% of Disney’s worldwide workforce. Meanwhile, Disney reported an 8% rise in sales to $23.5 billion (£19.45 billion) between October and December last year. Profit also rose, up by 11% to $1.3 billion.

    However, Disney+ reported a $1.5bn loss and its subscribers fell by around 2.4m to 161.8m.

    The plan will see the company restructure into three segments: entertainment, which will include film, TV, and streaming; sports-focused ESPN; and Disney parks, experiences, and products.

    “This reorganisation will result in a more cost-effective, coordinated approach to our operations,” Mr Iger told analysts on a conference call.

    The company’s streaming service remained its top priority, he added.

    Disney share price rose by more than 5% in extended trade after the announcement.

    The changes address some of the criticisms raised in recent months by billionaire activist investor Nelson Peltz, who criticised Disney of overspending on its streaming business.

    In response to the announcement Mr Peltz’s Trian Group said: “We are pleased that Disney is listening.”

    Mr Iger made a shock return as Disney’s chief executive, less than a year after he retired from the firm.

    He was brought back to steer the company through turbulent times after its share price plummeted and Disney+ continued to make a loss.

    Mr Iger, who had previously headed Disney for 15 years, replaced Bob Chapek, who took over as chief executive in February 2020.

    Mr Chapek was ousted after Disney’s streaming business posted a $1.5bn quarterly loss.

    Less than 24 hours after his return to Disney, Mr Iger said he was planning a major shake-up of the business.

    At the time, he said he had tasked a group of executives with designing “a new structure that puts more decision-making back in the hands of our creative teams and rationalises costs.”

  • PayPal lays off 2,000 employees over harsh global economy

    PayPal lays off 2,000 employees over harsh global economy

    In an effort to reduce costs, PayPal is laying off about 2,000 employees, or 7% of its workforce.

    The company that handles online payments claims that it was forced to make the choice due to “the challenging macro-economic environment.”

    Following tens of thousands of layoffs by major technology companies in the past month alone, PayPal made its announcement.

    Amazon, Microsoft, and Alphabet, the parent company of Google, have all announced significant job cuts this year.

    “We must continue to change as our world, our customers, and our competitive landscape evolve,” PayPal’s chief executive Dan Schulman said in a statement.

    Also on Tuesday, Snap – the parent company of social media platform Snapchat – warned that revenue for the three months to the end of March could fall by as much as 10%.

    “We anticipate that the operating environment will remain challenging, as we expect the headwinds we have faced over the past year to persist throughout Q1,” the company told investors.

    After the announcement, Snap’s shares fell by almost 15% in extended trade in New York.

    At the start of this year, Amazon announced it planned to cut more than 18,000 jobs because of “the uncertain economy” and rapid hiring during the pandemic.

    Also this month, Alphabet said it would shed 12,000 jobs, while Microsoft said up to 10,000 employees would lose their jobs.

    Last week, Swedish music-streaming giant Spotify said it would cut 6% of its about 10,000 employees, citing a need to improve efficiency.

    In another sign of the technology industry slowdown, US computer chip maker Advanced Micro Devices (AMD) on Tuesday reported a 98% fall in net income for the last three months of 2022.

    The company also said it expects revenue to drop by as much 10% in the current quarter.

    However, the figures were better than many investors had expected and AMD’s shares rose after the announcement.

    In Asia on Wednesday, the world’s second-biggest memory chip maker, SK Hynix, posted its largest quarterly loss on record.

    The South Korean company reported a worse-than-expected 1.7 trillion won ($1.4 billion; £1.1 billion) loss for the last three months of 2022, as sales fell by 38%.

    The firm pointed to falling computer chip prices and joined rival technology giants in warning that it expects an industry-wide downturn to worsen in the coming months, before recovering later in the year.

    It came after rival Samsung Electronics on Tuesday reported its lowest quarterly profit in eight years.

  • Goldman Sachs staff in Asia laid off as global job-cuts begins

    Goldman Sachs staff in Asia laid off as global job-cuts begins

    A major US investment bank is embarking on a massive cost-cutting drive that will result in the loss of thousands of jobs.

    Goldman Sachs employees are waiting to hear whether they will keep their jobs as the US investment bank embarks on a massive cost-cutting drive that could result in thousands of layoffs from its 49,000-strong global workforce.

    The long-anticipated job cuts at the Wall Street titan are expected to be the largest since the financial crisis, affecting most of the bank’s major divisions, with its under-fire investment banking arm facing the deepest cuts, a source told Reuters this month.

    A little more than 3,000 employees will be let go on January 9, according to an unnamed source.

    The cuts began in Asia on Wednesday, where Goldman completed cutting back its private wealth management unit and let go of 11 private bank staff in its Hong Kong and Singapore offices, a source with knowledge of the matter said.

    About eight staff were also laid off in Goldman’s research department in Hong Kong, the source added, with layoffs ongoing in the investment bank and other divisions.

    Goldman’s redundancy plans will be followed by a broader spending review taking in corporate travel and expenses, the Financial Times reported on Wednesday, as it counts the costs of a huge slowdown in corporate dealmaking and a slump in capital markets activity since the war in Ukraine.

    Goldman Sachs declined to comment.

    Goldman had 49,100 employees at the end of the third quarter in 2022, after adding significant numbers of staff during the coronavirus pandemic.

    The lender is also slashing its annual bonus payments this year to reflect the depressed market conditions, with payouts expected to fall by about 40 percent.

    Global investment banking fees nearly halved in 2022, with $77bn earned by the banks, down from $132.3bn one year earlier, Dealogic data showed.

    Banks struck $517bn worth of equity capital markets (ECM) transactions by late December 2022, the lowest level since the early 2000s and a 66 percent drop from 2021’s bonanza, according to Dealogic.

    Source: Aljazeera.com
  • McDonald’s sends job cut warnings

    McDonald’s sends job cut warnings

    As part of a significant reorganization that would also hasten the development of new locations, McDonald‘s CEO has warned employees to expect job layoffs.

    The company’s CEO, Chris Kempczinski, said that a “outdated and self-limiting” structure was harming the fast food juggernaut.

    “We are trying to solve the same problems multiple times, aren’t always sharing ideas,” he said.

    In a letter sent to employees globally, it said it would review corporate staffing levels by April.

    “There will be difficult discussions and decisions ahead,” the memo said.

    McDonald’s employs about 200,000 people in corporate roles and its owned restaurants, with 75% of them outside located outside of the US.

    Its chief executive also announced that certain projects will be stopped altogether.

    “This will help us move faster as an organization, while reducing our global costs and freeing up resources to invest in our growth,” he wrote in to the letter to staff, which was shared with investors.

    The firm did not provide details about the scope of the job cuts being looked at, or say which projects might be affected.

    But in an interview with the Wall Street Journal newspaper, Mr Kempczinski said he did not have a fixed goal for the number of cuts.

    “Some jobs that are existing today are either going to get moved or those jobs may go away,” he said.

    Pandemic boost

    As part of the new strategy, Mr Kempczinski said the company wants to push to open more restaurants “to fully capture the increased demand we’ve driven over the past few years”.

    Although dining generally suffered during the pandemic, McDonald’s has benefited from investments the firm made in online ordering and home deliveries.

    In the first nine months of the year, McDonald’s saw sales rise 6%, helped by price increases to items like its cheeseburgers.

    But its profits overseas have been hurt by the rise of the dollar and the exit from Ukraine.

    During its most recent update to investors in October, the firm said rising prices were also posing challenges, noting that at many of its restaurants – which are operated by franchisees – there was “increasing uncertainty and unease about the economic environment”.

    The Chicago-based company operates in more than 160 countries around the world.

    It said earlier this week it would be pulling out of Kazakhstan, which borders Russia, pointing to supply chain issues sparked by the war in Ukraine.

    McDonald’s pledged to leave Russia in May after setting up there 32 years ago – the latest change after several years of upheaval in the restaurant industry.

    Source: BBC.com

  • Amazon to layoff 18,000 jobs as it cuts costs

    Amazon to layoff 18,000 jobs as it cuts costs

    Amazon intends to cut more than 18,000 jobs, the most in the company’s history, in a bid to cut costs.

    The online retailer, which employs 1.5 million people worldwide, did not specify which countries would be affected, but noted that Europe would not be left out.

    The majority of the job losses will be in its consumer retail and human resources divisions.

    Andy Jassy, the company’s CEO, blamed the layoffs on the “uncertain economy,” saying the company had “hired rapidly over several years.”

    “We don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted,” he said in a memo to staff.

    He said the announcement had been brought forward due to one of the firm’s employees leaking the cuts externally.

    “Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” he added.

    Amazon’s sales have slowed after a surge during the pandemic, when customers bored at home spent a lot of time online.

    A potent combination of a downturn in advertising revenues due to businesses seeking to save cash and consumers spending less as the cost of living crisis bites is hitting tech firms hard.

    Other major tech companies, such as Meta, which owns Facebook, Instagram, and WhatsApp, and cloud-based business software firm Salesforce, have recently announced significant layoffs.

    Amazon has already announced that it’s cutting back on projects like the Echo (better known as Alexa) and delivery robots – which were nice-to-haves but not actually making money.

    Anecdotally, there’s a tendency in Silicon Valley for firms to hire and retain talented workers on attractive salaries, even if they’re not immediately needed, primarily in order to stop them working for rivals. This culture is a luxury that big tech can no longer afford to maintain.

    Amazon employees affected by the cuts are expected to be informed by January 18.

    The move comes after the technology giant said last year that it would reduce its headcount without saying how many jobs would be cut.

    A potent combination of a downturn in advertising revenues due to businesses seeking to save cash, and consumers spending less as the cost of living crisis bites, is hitting tech firms hard.

    ‘More pain ahead’

    The company had already stopped hiring new staff and stopped some of its warehouse expansions, warning it had over-hired during the pandemic.

    It has also taken steps to shut some parts of its business, cancelling projects such as a personal delivery robot.

    “Prior to the pandemic, tech companies would often remove only the bottom 1% to 3% of their workforce,” Ray Wang from the Silicon Valley-based consultancy Constellation Research told the BBC.

    Dan Ives from investment firm Wedbush Securities said he believes Amazon will face “more pain ahead” as customers tighten their belts.

    Industry-wide cuts

    Tens of thousands of jobs are being shed across the global technology industry, amid slowing sales and growing concerns about an economic downturn.

    In November,

    Facebook owner Meta announced that it would cut 13% of its workforce.

    The first mass lay-offs in the social media firm’s history will result in 11,000 employees, from a worldwide headcount of 87,000, losing their jobs.

    Meta chief executive Mark Zuckerberg said the cuts were “the most difficult changes we’ve made in Meta’s history”.

    The news followed major layoffs at Twitter, which cut about half its staff after multi-billionaire Elon Musk bought the firm in October.

    Amazon started laying off staff as early as November, according to LinkedIn posts by workers who said they had been impacted by job cuts.

    Posts seen by the BBC included those from employees in Amazon’s Alexa virtual assistant business, Luna cloud gaming platform division, and Lab – the operation behind the Kindle e-reader.

    Source: BBC.com

  • Meta eliminates over 11,000 jobs -the highest number in its history

    Facebook’s parent company, whose stock has lost more than two-thirds of its value, also announced plans to cut discretionary spending and extend its hiring freeze into the first quarter.On Wednesday, Meta Platforms Inc announced the layoff of 13% of its workforce, or more than 11,000 employees, in one of the largest technology layoffs this year as the Facebook parent company battles rising costs and a weak advertising market.

    The massive layoffs, the first in Meta’s 18-year history, come on the heels of thousands of layoffs at other leading technology companies such as Elon Musk’s Twitter and Microsoft Corp.

    The pandemic boom that boosted tech companies and their valuations has turned into a bust this year in the face of decades-high inflation and rapidly rising interest rates.

    Meta, whose shares have lost more than two-thirds of their value, said it also plans to cut discretionary spending and extend its hiring freeze through the first quarter.

    “Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” the company’s founder Mark Zuckerberg said in a message to employees announcing the layoffs.

    “I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.”

    Potential recession

    An economic slowdown and a grim outlook for online advertising – by far Meta’s biggest revenue source – have contributed to the company’s woes. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.

    Some of the pain is company-specific, while some is tied to broader economic and technological forces.

    Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted there was no choice but to cut the jobs “when the company is losing more than $4M/day”, though did not provide details about the losses.

    Meta has worried investors by pouring more than $10bn a year into the “metaverse” as it shifts its focus away from social media.

    Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.

    Meta and its advertisers are bracing for a potential recession. There is also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms such as Facebook, Instagram and Snap to track people without their consent and show them specially tailored advertisements.

    Competition from TikTok is also an a growing threat as younger people flock to the video sharing app over Instagram, which Meta also owns.

    Meta’s profits fell to $4.4bn in the last quarter, a 52 percent decrease year-on-year.

    “Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected at the beginning of this year, and we want to make sure we’re operating efficiently,” wrote Zuckerberg.