LinkedIn has become the latest company to join the growing chorus of big tech firms that are downsizing, right-sizing, or some other type of “sizing” after announcing this morning that it will be cutting 716 jobs.
The news were shared publicly in a letter written by the Chief Executive Officer of the Microsoft-backed professional networking platform, Ryan Roslansky, who cited “shifts in consumer behavior and slower revenue growth” as the two primary reasons for these forced departures.
“As we guide LinkedIn through this rapidly changing landscape, we are making changes to our Global Business Organization (GBO) and our China strategy that will result in a reduction of roles for 716 employees”, Roslansky commented.
LinkedIn Dismantles its Chinese InCareer Platform
LinkedIn’s decision to launch its InCareer unit in the Asian country dates back to 2021 when tensions between the United States and China were at a peak. At that time, the company decided to shut down its main app in the country and create this standalone platform instead.
Despite taking this step back, the firm will be keeping its Talent, Marketing, and Learning business in the country but expects to fully shut down InCareer in early August this year.
In this regard, CEO Roslansky highlighted: “Though InCareer experienced some success in the past year thanks to our strong China-based team, it also encountered fierce competition and a challenging macroeconomic climate”.
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Despite this decision, LinkedIn will be opening up 250 new job positions later this month that will strengthen its operations, account management, and new business departments as part of an ongoing alignment of its organizational structure to its growth opportunities.
US residents who are being affected by today’s decision will be receiving multiple benefits including severance pay, health benefits, and career placement assistance. Chinese workers who had a job at InCareer until today will receive help to find new opportunities in the marketplace.
Nearly 200,000 Workers Have Been Ousted in the Tech Sector in 2023
Layoffs in the tech industry have been happening continuously in the first four months of 2023, with the total number of job cuts nearing 200,000 daily. One of the biggest events recently was Shopify’s choice to cut a fifth of its global staff as the company fully embraces the AI era.
Data from Layoffs.fyi indicates that, including the LinkedIn layoffs discussed earlier, the tally stands at 191,538 departed tech workers from a total of 660 companies.
Other prominent companies that recently announced waves of forced departures include Upwork, the freelance marketplace, which reduced its headcount by 15% earlier this month, and Sabre, the travel software giant, which shrunk its organizational structure by 15% after getting rid of 1,100 employees.
Four factors are influencing companies to reduce their headcount this year. First, many tech firms were forced to go on a hiring spree during the pandemic as the demand for their products, services, and solutions skyrocketed during the health crisis.
However, now that the global economy is seemingly entering a recessionary cycle, they are either right-sizing in preparation for what’s coming or responding to a slowdown in their revenue growth rates and other similar metrics.
In addition, investors are pressuring tech companies – primarily those in the earliest stages of their development – to keep their operating expenses and cash burns in check to avoid sinking if the funding market dries up.
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