In an unexpected move, Microsoft , the owner of LinkedIn, recently announced its decision to reduce its workforce by cutting 668 jobs across various departments, including engineering, talent, and finance.
This decision comes as a surprise to many, especially considering Microsoft’s track record of steady growth and innovation. The company, however, has provided several reasons behind this decision, which reflects the dynamic nature of the tech industry.
LinkedIn had previously downsized by 716 jobs in May, following a trend of cost-cutting measures observed across prominent tech companies. In a statement posted on the LinkedIn platform, the company emphasized the challenging but necessary aspect of managing their business, which includes talent adjustments.
The latest round of job cuts translates to roughly 3% of LinkedIn’s overall workforce, which comprises around 20,000 employees. LinkedIn primarily generates revenue through job advertisement listings and premium subscriptions, serving as a global platform for recruiters, boasting approximately 950 million users.
The company faced challenges due to a slowdown in hiring activities and decreased advertising spending. Despite these obstacles, it continues to attract new members. In the fourth quarter of 2023, LinkedIn’s revenue showed a 5% year-on-year increase, marking a decline from the 10% growth observed in the previous quarter.
Since late 2022, the technology sector has witnessed a significant wave of layoffs, with notable companies such as Amazon, Meta, and Alphabet (Google’s parent company) reducing their workforces. In January 2023, Microsoft, LinkedIn’s parent company, announced 10,000 job cuts as part of a broader restructuring effort.
These tech giants have consistently invested in cutting-edge AI-powered technologies, like ChatGPT (owned by Microsoft) and Bard (developed by Google).
The technology sector in the United States has reported more job reductions than any other industry in the current year, with over 150,000 layoffs, according to a recent report from Challenger, Gray & Christmas, a US-based employment consultancy.
Last Updated: 17 October 2023