Layoffs Are Still In The Air

Earnings-wise, this a will be a quiet one before the next earnings season kicks off in mid-October. But layoffs are consistently in the air, with General Motors GM and Ford Motor F opening the week by announcing they will be laying off 500 more workers.

Even the all-mighty Big Tech has been cutting thousands of jobs since 2022, including Amazon.com AMZN, Meta Platforms META, Alphabet GOOG Google and Microsoft Corporation MSFT. According to data from Layoffs.fyi, MarketWatch reported that more than 238,000 tech employees across the globe have been laid off since the beginning of 2023, with this year easily surpassing 2022 in terms of job cuts.

Meanwhile, AI investments continue to rise and are found to be one of the reasons behind these mass layoffs. Although AI is mostly linked to tech layoffs, the industry behind its creation, the job cuts trend has spread across many business fronts.

Automotive And The EV World

GM has now laid off nearly 2,000 workers across the five plants affected by an unprecedented strike. As a result of walkouts, more than 6,000 workers from GM, Ford and Stellantis STLA and their suppliers lost their jobs. On September 15th when the strike kicked off, Ford laid off 600 workers. On Monday, Ford announced the furloughs of another 330 workers. The unprecedented strike will make the EV transition of General Motors and Ford Motor even more challenging. Making EVs is on its own much more challenging as this is everything but an easy journey Even the EV startup Rivian Automotive RIVN who brought the world’s first electric pickup to the road had to lay off 6% of its workforce which comes to about 840 workers back in February. Rivian is still struggling to reach profitability and supply chain issues made things even more challenging. This was the second round of layoffs Rivian as it struggled with the price war that Tesla Inc TSLA kicked off. It seems that Rivian did succeed in improving its operational efficiency as it topped estimates with Q3 deliveries, unlike Tesla who fell short of expectations.

Gaming

At the end of September, Epic Games, the maker of Fortnite, announced it will be trimming 16% of its workforce or more precisely 830 employees in order to stabilize its finances.

Networking

Earlier in September, Cisco Systems Inc. CSCO joined the redundancy train as it announced it will be laying off 350 employees this month.

Streaming

At the beginning of September, Roku Inc ROKU announced it will be trimming its workforce by 10%. Roku's second round of 2023 layoffs will affect 300 people, adding to the 200 it dismissed in March and 200 redundancies from 2022. The trend is also present in music streaming with Spotify Technology SA SPOT ended its trend of spending heavily to expand its podcast empire. Things changed at Spotify dramatically when 2023 kicked off with restructuring under which content chief Dawn Ostroff left the company and Salesforce announced a 6% reduction of its workforce. It followed up its January layoff plans in June by cutting 200 podcast department jobs.

Social Media 

On September 27th, Snap Inc SNAP decided to make cuts at its AR Enterprise by slashing about 170 job posts. Snap conducted two rounds of job cuts in just over a year as last August, it laid off 1,280 employees which made about 20% of its workforce. Snap continues to work towards sustainable profitability as it focuses on core advertising.

Apple Is The Last Tech Firm Standing As It Continues To Resist The Layoffs Trend

Apple Inc AAPL continues to contrast tech redundancies. Only a day after Epic Games revealed its newest job cuts, Apple announced it is hiring. Apple CEO Tim Cook stated on several occasions that layoffs are the last resort. But even Apple is conducting cost-cutting initiatives such as putting a lid on spending. Analysts find that the reason why Apple hasn’t been dragged in the mass layoffs trends is because it hired more efficiently during the pandemic. All in all, with or without generative AI investment, layoffs certainly tell the story of management’s stewardship of shareholder dollars and Apple is reaping the reward for being cautious with hiring during the pandemic-fueled hiring binge, unlike its tech peers, Amazon, Google, Microsoft and Meta.

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.