PayPal Holdings Inc., Workday Inc. and HubSpot Inc. are the latest tech companies to announce layoffs as firms large and small attempt to cut costs to deal with a slowing economy.
PayPal leads the list, announcing that it plans to lay off 2,000 employees or about 7% of its workforce. In a letter to employees, President and Chief Executive Officer Dan Schulman said the “transformation” was to address the “challenging macroeconomic environment while continuing to invest to meet our customers’ needs.”
The job cuts at PayPal will occur in the coming weeks, with some parts of the company affected more than others. “Change can be difficult – particularly when it includes valued colleagues and friends departing,” Schulman wrote. “We will face this head-on together, drawing on the unparalleled scale of our global platform, the strategic investments we have made to strengthen our core capabilities and the trust and loyalty of our customers.”
Workday was next up, announcing that it will lay off 3% of its workforce, which according to CNBC, would equate to about 525 people. The majority of layoffs of the company will happen in its product and technology division, with layoffs expected to be completed by Jan. 31.
In a letter to employees, co-CEOs Aneel Bhusri and Carl Eschenbach cited a “global economic environment that is challenging for companies of all sizes” as driving the decision.
“As we navigate this uncertain environment, it’s important we help ensure Workday is set up for continued growth for many years to come,” Bhursi and Eschenbach wrote. “This includes continuing to invest in the strategic areas of our business so we can capitalize on the opportunity in front of us; aligning our resources against business priorities; optimizing in certain areas so we can operate more efficiently; and prioritizing to meet customer and market demands.”
Hubspot also announced it’s cutting 7% of its workforce, with around 500 people laid off earlier today.
The company may be different, but the messaging was roughly the same — a worsening or at least uncertain economy. “We came into 2022 anticipating growth would slow down from 2021, but we experienced a faster deceleration than we expected,” CEO Yamini Rangan said in an email to employees reported by The Boston Globe. “Unfortunately, the level of uncertainty in customer demand now tells us that we may have more challenging times ahead. We need to set ourselves up to weather this storm.”
One interesting difference with HubSpot is that Rangan admitted to making previous mistakes, saying that the company overhired at the start of the pandemic because of surging demand. Companies with the most extensive layoffs tend to be the ones that overhired during the COVID-19 pandemic, or as The New York Times put it on Jan. 21, the layoffs reverse a small part of the pandemic hiring spree.
PayPal, Workday and Hubspot were not the only companies announcing layoffs today, with NetApp Inc. also announcing earlier that it was laying off 8% of its global workforce. Unsurprisingly, NetApp cited “macroeconomic challenges and reduced spending environment” in a Securities and Exchange Commission filing.