Layoffs: Spotify, IBM, SAP, Ford, Dow… jump on the cost-cutting bandwagon
Recent corporate layoffs have been huge. The floodgates have opened, especially in the technology sector.and many large companies are announcing massive and immediate layoffs to contain costs and cope with the current scenario of rising inflation and monetary tightening.
Last week Microsoft announced that it would lay off 10,000 employees by the end of the third fiscal quarter. of 2023, while Alphabet (parent company of Google) has announced that it will lay off 12,000 people, or 6% of its workforce.. The goal, said CEO Sundar Pichai, is “to sharpen focus, redefine the cost base and direct capital to the highest priorities” while weathering a tough economic cycle.
This week the layoffs continued and there was a veritable flurry of announcements, some of them – like that of IBM, which will lay off 3,900 people.– coinciding with the publication of the results, which is foreseeable, in the middle of the season of accounts, there will be more in the days and weeks to come..
In Europe, and also in the technology sector, the most discussed was that of SAP.who announced that will lay off 3,000 people, or 2.5% of its workforce.. However, it was not the only one. In the automotive sector, Ford plans to cut 3,200 jobs on the Old Continent.whereas in the toy sector, Hasbro will cut 1,000 jobs (15% of its workforce) in order to save 250 to 300 million dollars. “The changes are necessary to restore our company to a competitive, industry-leading position and lay the foundation for our future success,” said Chris Cocks, CEO of Hasbro.
It can therefore be said that the layoffs do not only concern the technological sector. Other companies in a wide range of sectors are adjusting their workforces. in a difficult context where rising costs weigh on their margins. The largest chemical company in the world, Dow Chemicalalso announced this week that it will cut 2,000 jobs as part of a plan to save $1 billion by 2023. It did so “in response to near-term macroeconomic uncertainty.”
It can also be said that, although the cuts are concentrated in the United States –Spotify also announced this week that it will lay off 6% of its workforce.-, extend to Europe, either because the American companies concerned are also reducing their staff in other parts of the world, or because the European companies are directly carrying out layoffs.
In the stock market, corporate stocks tend to rise when announcements of staff departures are made. because investors value cost-cutting and streamlining plans positively. However, experts warn that the cost-saving measures may not be entirely positive as reflect the slowdown in demand, which reflects the complexity of the current macroeconomic scenario.