LinkedIn today announced that it will lay off 668 employees across its product development, human resources and finance groups.
The job cuts come a few months after LinkedIn parent Microsoft Corp. implemented its second workforce reduction of the year. The first, larger round of layoffs was announced in January and saw the technology giant let go 10,000 employees. LinkedIn’s newly detailed workforce reduction is separate from Microsoft’s earlier job cuts.
According to an internal memo obtained by CNBC, 563 of the 668 affected staffers work at LinkedIn’s research and development division. The memo specifies that 137 engineering management professionals and 38 product experts are among the employees who will be leaving the Microsoft unit. According to LinkedIn, its talent and finance teams were also impacted.
The restructuring is designed to “improve agility and accountability, establishing unambiguous ownership, and driving improved efficiency & transparency through reduced layering,” LinkedIn engineering executives Mohak Shroff and Tomer Cohen wrote in the memo.
The job cuts at LinkedIn’s engineering division come two weeks after the social network debuted one of its biggest product updates in recent memory. It introduced a new artificial intelligence tool, Accelerate, that can automatically generate ads for marketing teams. LinkedIn also detailed a second AI feature that promises to streamline recruiting tasks.
The social network’s recruiting tools are part of its so-called Talent Solutions business. That business accounted for about $7 billion of the more than $15 billion in revenue LinkedIn generated during its most recent fiscal year. According to the Microsoft unit, about 4.9 million human resources professionals at 700,000 companies use its recruiting tools.
The rate at which LinkedIn’s user base is growing has accelerated in each of the past eight quarters. Its revenue growth, in contrast, followed the opposite trend and slowed during the same time. LinkedIn’s top line increased by 5% year-over-year, or $197 million, last quarter.
The social network’s slowing revenue momentum may have factored into the layoffs announced today. In particular, LinkedIn may be seeking to redirect resources to new growth initiatives. Shroff and Cohen wrote in the internal memo announcing the job cuts that the Microsoft unit “will open a small number of new roles to fill critical gaps in our ambitious roadmap.”
LinkedIn became part of Microsoft in 2016 through a $26.2 billion acquisition. At the time, the social network generated about $2.9 billion in annual revenue, or less than a fifth what it made during its most recent fiscal year. The LinkedIn deal ranked as Microsoft’s largest-ever acquisition until last Friday, when the tech giant completed its purchase of video game developer Activision Blizzard Inc. for $68.7 billion.
Your vote of support is important to us and it helps us keep the content FREE.
One-click below supports our mission to provide free, deep and relevant content.
Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger and many more luminaries and experts.