Why Microsoft and Gopuff Are Latest Tech Firms to Cut Jobs

Microsoft Corp. MSFT 0.95%▲ is cutting a small percentage of its staff, the latest in a string of layoffs by high-profile tech companies.

The software maker said it is cutting a number of positions, affecting less than 1% of its total workforce. Microsoft, which employed about 181,000 people as of June 2021, is making the cuts as a part of a regular adjustment at the start of its fiscal year, a spokesman said. The company’s overall workforce will still rise in the coming year, he said. Bloomberg earlier reported the cuts.

Rapid-delivery startup Gopuff told its investors in a note Tuesday that it is cutting 10% of its workforce, or about 1,500 amid growing concerns about the economy.

The tech industry has been hiring at a rapid pace for years, but the easy money that fueled years of startups is drying up. The reversal of some pandemic trends, combined with inflation, supply-chain shortages and a labor crunch, is cooling parts of the once red-hot tech sector.

A number of tech companies in recent months have with slowing growth and fallout from other macroeconomic factors.

Meta Platforms Inc.’s head of engineering told his managers to identify and report low performers they could force those employees out of the company, according to a post published Friday in an engineering managers-only group in the company’s internal social network.

That followed Twitter Inc. last week saying it would lay off 30% of its talent acquisition team. Tesla Inc. late last month laid off about 200 people and Netflix Inc. cut about 3% of its workforce as it deals with a loss in subscribers.

Amazon.com Inc. has also looked to pare hiring in some areas. Videogame companies including Unity Software Inc. and GameStop Corp. have recently shed staff while Uber Technologies Inc. and Lyft Inc. have paused some hiring.

In some cases, executives have warned employees to brace themselves for tougher times. Jobs in computer and electronic products grew by 2,300 from May, for example, down from an average of more than 2,800 in the prior five months of this year.

Microsoft’s move follows some challenges for the company. The company in June reduced sales and earnings guidance for the quarter, citing the impact of foreign exchange rates. The company could also be affected by a drop in demand for personal computers. Shipments in the second quarter dropped by close to 13% from the year-ago period, marking their steepest decline in nine years, according to data from research firm Gartner Inc.

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Microsoft and Gopuff Are Latest Tech Firms to Cut Jobs

Companies have been adjusting hiring plans amid growing economic concerns

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July 12, 2022 3:22 pm ET

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Microsoft Corp. MSFT 1.04%▲ is cutting a small percentage of its staff, the latest in a string of layoffs by high-profile tech companies.

Rapid-delivery startup Gopuff told its investors in a note Tuesday that it is cutting 10% of its workforce, or about 1,500 employees amid growing concerns about the economy.

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The tech industry has been hiring at a rapid pace for years, but the easy money that fueled years of highflying startups is drying up. The reversal of some pandemic trends, combined with inflation, supply-chain shortages and a labor crunch, is cooling parts of the once red-hot tech sector.

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A number of tech companies in recent months have laid off employees to deal with slowing growth and fallout from other macroeconomic factors.

Meta Platforms Inc.’s head of engineering told his managers to identify and report low performers so they could force those employees out of the company, according to a post published Friday in an engineering managers-only group in the company’s internal social network.

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Microsoft recently reduced sales and earnings guidance, citing the impact of foreign exchange rates.

PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

Philadelphia-based Gopuff announced its layoff plans in a Tuesday note to investors, reviewed by The Wall Street Journal. It also said it plans to shut 76 of its warehouses, covering roughly 12% of its network. The company cut 3% of its workforce in March.

The note from Gopuff said the additional cuts are an attempt to get ready for tougher times “as we prepare for what could be a much more significant macroeconomic downturn than we are experiencing currently.”

The company said it would make investments that drive more profit, including technology to run ads on its app, and continue to focus on overseas markets such as the U.K. that are leading revenue growth. Gopuff said it hopes to become profitable in 2024 on the back of these changes.

Gopuff, founded in 2013, leads the instant-delivery market in the U.S.

Investors raced to pour money into fast-delivery startups during the pandemic as customers grew accustomed to ordering household essentials online. Many startups that promised delivery in under 15 minutes piled up fast losses and folded within a year.