Due to massive revenue drops, anticipation of a recession next year, a rise in costs, a high number of $100,000+ salaries, among other factors, Silicon Valley companies including Twitter, Lyft, and Stripe have cut thousands of jobs in only the last few days.
Twitter was the most prominent company to have cut people in the last two days. Only a week after being bought by billionaire Elon Musk, the social media company announced mass layoffs on Friday. Earlier this week, the company sent staff e-mails saying that everyone would be known of their status noon on Friday. While the total number of jobs to be cut remains unknown, reports have shown that it could be anywhere from 25% to 50% of its staff. Bloomberg reported earlier this week that it would likely be 50%, resulting in 3, 700 jobs lost.
The company was widely seen as heading towards layoffs this year anyway, but Musk’s takeover, which had the billionaire take out substantive debt financing to buy the company for $44 billion, quickly led to speculation that the number of jobs lost would be even higher. Following Musk’s takeover, speculation only grew after initial firings of top executives, and numerous companies halting advertising due to claims of concern over Musk removing more Tweet restrictions and allowing things like hate speech (or all speech), to be allowed back. General Motors, Volkswagen, Mondelez, and General Mills are a few of the companies to hit the brakes on further marketing on the site in recent days.
“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists,” tweeted Musk on Friday. “Extremely messed up! They’re trying to destroy free speech in America.”
Mass tech layoffs across the Bay Area, Silicon Valley
Thursday, rideshare company Lyft also announced massive layoffs, affecting 13% of their staff, or around 550 employees. In a statement, the company also announced that their first-party vehicle service business would be sold off, with the final decision happening due to worries about a recession next year and rising rideshare insurance costs.
“Despite efforts to avoid this day, we’ve made the difficult decision to lay off 13% of the team,” said Lyft in a statement on Thursday. “Additionally, we are pursuing a divestiture of our first-party vehicle service business, and in that case we do expect most of those team members will be offered roles from the acquiring company.
Many more layoffs have also occurred around the tech sector in the past few days. Financial services company Chime cut 12% of their staff, or 160 people. Employer company Opendoor cut 550 jobs, or roughly 18% of their staff. Finance tech giant Stripe said they had overhired in the first place, reducing their staff by 14%, or 1,120 people. Many other small start-ups and tech firms had other similar percentages lost, with companies losing dozens of people each across the Bay area.
Prior to the last several days, San Francisco and the rest of the Bay Area had already seen a large number of companies lay people off and shrink as they try and stabilize in the expensive region after the COVID-19 financial shockwave. Gap, Snap, Tesla and others have been among the most noteworthy names for layoffs this year. All of this is also in addition to the number of companies that cut positions following moving their headquarters out of the area in recent years, including Tesla, HP, and Oracle.
While efforts have been made to retain companies, with San Francisco Mayor London Breed offering city jobs for laid-off Twitter employees on Friday, it has done little to stop the tech exodus out of the Bay area.
“It was only a matter of time before something like this happened across the industry,” explained Julie Ochs, a San Jose-based headhunter and hiring specialist, to the Globe on Friday. “These companies hired like crazy during the good times of the 2010’s and really built themselves up here. Costs skyrocketed, but they could afford it. They hired more people to expand then, and soon you had all these giants around here. Then COVID hit, then rising costs, and, in Twitter’s case, worrying advertisers, and look at what happened.”
“And this is all happening in San Francisco and Silicon Valley too. Cities like LA and San Diego and even Sacramento just due East aren’t really being affected because they diversified. Here, the city has been slowly putting all their eggs in one basket. Detroit had cars, Pittsburgh had steel, and many other cities revolved around one industry. Same thing is happening here. I mean, a lot of other companies are in San Francisco, but they’re being hit by high rents and costs now too, and are also shrinking. The dam finally burst. Where we stand when this is all over will not be pretty. These are thousands of jobs a day going at this pace. It’s crazy. It’s all happening at once it seems too.”
More tech companies are expected to announce layoffs in the Bay area in the next several weeks.
View Comments (3)
What do Twitter employees do that a twitter user would miss or notice?
Elections (stolen and non) have consequences...
Hope all these laid-off employees kept their powder dry so they can vote Republican next Tuesday. because this is ONE HUNDRED PERCENT a result of Joe Biden's reflexive policies FROM DAY ONE of his time in office....especially ENERGY policy...
NONE of this would have happened had President Trump rightfully been re-elected to a second term...
But at least we don't have "mean tweets"...
VOTE REPUBLICAN next Tuesday and repudiate the Commmunist globalist Democrat direction that this country has been placed on, since Bribem was INSTALLED as pResident!
coming to a workplace near you. more useless peers