Spotify to cut almost a fifth of staff

Spotify will axe almost a fifth of its workforce after warning that economic growth had slowed dramatically and it needed to cut costs as the music streaming giant seeks to turn subscriber growth into consistent profitability.

In a memo to staff on Monday, chief executive Daniel Ek said Spotify would cut about 17 per cent of its global workforce, about 1,500 people. Spotify employs more than 9,000 people worldwide.

“I recognise this will impact a number of individuals who have made valuable contributions,” Ek said. “To be blunt, many smart, talented and hard-working people will be departing us.”

Spotify shares jumped 8 per cent in morning trade in New York.

Despite its popularity, Spotify has throughout its history struggled to make a consistent profit — a source of increasing frustration from investors. Activist investor ValueAct in February acquired a stake in Spotify and raised concerns that its expenses had “exploded”.

Combined with earlier rounds of cuts, Spotify has in 2023 fired more than 2,000 employees, or a quarter of its workforce, while its user growth has soared. 

Nextdoor : Social Media Giant Slashes 25% of Staff

Nextdoor (NYSE:KIND), the neighborhood-centric social media platform headquartered in San Francisco, is slashing its employee count by a quarter as it looks to weather the economic challenges that have beset social media companies and the tech industry at large. 

The company confirmed the employee cutback in a third-quarter earnings report released Tuesday afternoon, with Nextdoor CEO Sarah Friar calling the layoffs “the hardest decision we have had to make as a team.” 

In a U.S. Securities and Exchange Commission filing last year, Nextdoor confirmed it employed 704 people. Assuming the number stayed flat, that means 176 Nextdoor employees will get a pink slip. A Nextdoor spokesperson did not provide an exact number but confirmed that almost 200 employees are part of the reduction.

This marks the first round of layoffs at Nextdoor this year but continues a worrisome uptick of layoffs in recent weeks as interest rates remain high and advertising revenue declines.

Charles Schwab lays off up to 2,154 people out of 35,900 staff

Charles Schwab Corp. has laid of 5% to 6% of its total head count of 35,900 as it moves to contain costs and remove complexity from the broker as it integrates its acquisition of TD Ameritrade.

The employee reduction amounts to 1,795 to 2,154 people after it disclosed plans to reduce its expenses in July.

Other steps include changes to its real estate footprint, streamlining its operating model, and staffing reductions mostly in non-client-facing areas.

“We have said good-bye to approximately 5-6 percent of our workforce,” according to an internal memo at Schwab SCHW, +1.77% seen by MarketWatch from a company spokesperson. “These were hard but necessary steps to ensure Schwab remains highly competitive, with industry-leading levels of efficiency, well into the future.”

Schwab stock rose by 1.9% % on Wednesday.

The job cuts were part of a previously disclosed effort to save $500 million in the second half of the year.

Citing a report by RIABiz that the broker has laid off up to 2,000 employees this week, William Blair analyst Jeff Schmitt reiterated an outperform rating on Schwab.

He said the company offers “the potential for a significant rebound in EPS in 2024 and 2025 as cash sorting abates, short-term funding costs decline, client cash stabilizes, organic growth returns to historic levels and share buybacks reemerge.”

Schmitt said in a research note on Tuesday that key risks facing Schwab include higher-than-expected cash sorting — moving money into higher interest-bearing accounts — as well as integration risks from its TD Ameritrade acquisition and regulatory reforms such as changes to payment for order flow and a near-term shift in the Fed’s interest rate policy to easing.

Stellantis announces more layoffs in Ohio

Stellantis on Thursday announced another round of temporary layoffs in Ohio, which it is says is due to the UAW strike.

The company, in a news release, said the impact of the strike at the company's Toledo Assembly Complex would lead to an additional 100 layoffs at the Toledo Machining Plant in Perrysburg, Ohio, effective Monday, bringing the number of workers on layoff there to 170.

"The facility supplies components for the Jeep Wrangler, Jeep Wrangler 4xe and Jeep Gladiator and has reached maximum inventory level. Across its facilities in three states, the company now has 1,520 employees on temporary layoff. Stellantis continues to closely monitor the impact of the UAW strike action on our manufacturing operations," according to a news release supplied by company spokesperson Ann Marie Fortunate.

Nokia to cut up to 14,000 jobs after 69% profit plunge

• Nokia said it would cut up to 14,000 jobs as part of a cost cutting plan following third quarter earnings that plunged.
• The Finnish telecommunications giant said that it will reduce its cost base and increase operation efficiency to “address the challenging market environment.”

• The substantial layoffs come after Nokia reported third-quarter net sales declined 20% year-on-year to 4.98 billion euros. Profit over the period plunged by 69% year-on-year to 133 million euros.

Nokia FI:NOKIA set plans to cut its workforce by up to 14,000 as it reported a steep drop in third-quarter profit. The telecom equipment maker said it’s looking to reduce its workforce to between 72,000 and 77,000 workers, from 86,000 now, by the end of 2026. Nokia’s profit dropped by 69% to 133 million euros, or 2 cents a share, as revenue fell 20% to 4.98 billion euros. Analysts polled by Visible Alpha forecast earnings of 395 million euros on revenue of 5.66 billion euros. Nokia said it’s tracking toward the lower end of its net sales range for 2023 and toward the mid-point of its comparable operating margin range.

 

Ford Motor announces 600 job cuts related to UAW strike

(Reuters) - Ford Motor has announced layoffs of 600 workers at its Michigan assembly plant, related to the United Auto Workers (UAW) union strike, CNBC reported on Friday.

 

 At Ford's Michigan Assembly Plant in Wayne, Michigan, dozens of UAW members were picketing the factory's main entrance on Friday, and many rued changes to their contract and work rules over the past 15 years that especially cut new "Tier II" hires at lower wages and reduced benefits.

Citigroup reorganizes businesses, cuts jobs as bank is mired in stock slump

While some rivals have been eliminating jobs amid a slump in Wall Street activity, Citigroup staff levels have grown as the firm complies with regulators’ demands to improve risk controls. The bank had 240,000 workers as of June, 4% higher than a year earlier.

CEO Jane Fraser addressed the coming job cuts in a memo to staff.

“We’ll be saying goodbye to some very talented and hard-working colleagues who have made important contributions to our firm,” Fraser said.

T-Mobile US to cut 5,000 jobs as cheaper plans weigh on costs

T-Mobile US said on Thursday it would reduce its workforce by about 7% by cutting 5,000 jobs in the United States as the wireless carrier grapples with rising costs related to adding more subscribers in a competitive market.

The carrier has been taking the lion’s share of subscribers looking for cheaper plans in the last three quarters through discounted bundles, but that has taken a toll on T-Mobile.

“What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago,” CEO Mike Sievert said in an email to employees.

The jobs cuts over the next five weeks will target corporate and back-office roles, and some technology jobs, Sievert said, adding that retail and consumer care divisions will not be impacted.

Definitive Healthcare to reduce workforce by 42 people, or approx. 4 percent

Restructuring plan: On July 27, 2023, the Company committed to a restructuring plan intended to reduce operating costs, improve operating margins, and continue advancing the Company's ongoing commitment to profitable growth. The Plan provides for a reduction of the Company's current workforce by 42 people, or approximately 4 percent of its total workforce. The Company estimates that in the third quarter of 2023 it will incur pre-tax cash restructuring and related charges to its GAAP financial results of approximately $1.8 million to $2.0 million, consisting primarily of severance payments, employee benefits, and related cash expenses, as well as a non-cash charge related to the vesting of share-based awards for employees who are terminated. The Company expects the Plan will be substantially complete by the end of the third quarter of 2023.

Wish to reduce workforce by approx. 255 employees

Board approves plan to reduce workforce by approx. 255 employees, or about 34% of the current global workforce; ests approx. $8.7 mln in restructuring charges

• WISH's Board of Directors approved a plan to reduce the Company's workforce by approximately 255 employees, representing about 34% of the Company's current global workforce (the "RIF Plan"). This includes approximately 160 employees in the United States, representing about 41% of the Company's domestic workforce and approximately 95 non-U.S. employees, representing about 26% of the Company's international workforce. In connection with the RIF Plan, and in compliance with the WARN Act, for a period of 60 days commencing on August 1, 2023, the impacted employees will be provided severance benefits, including cash severance payments and reimbursement of medical insurance premiums. The RIF Plan is intended to refocus the Company's operations to support its ongoing business prioritization efforts, better align resources, and improve operational efficiencies.
• The Company estimates that it will incur non-recurring charges of approximately $8.7 million related to WARN Act compliance, severance payments to affected employees globally, and other personnel reduction costs in connection with the RIF Plan. The Company expects that the majority of these charges will be incurred in the third quarter of 2023 and that the implementation of the RIF Plan will be substantially complete by the end of fiscal year 2023.
• The Company expects to realize run-rate savings of approximately $43 million to $46 million on an annualized basis starting in the fourth quarter of 2023.

Goldman Sachs to ax 125 managing directors worldwide

Goldman Sachs has begun axing managing directors across the globe as the Wall Street giant looks to cut costs amid a profitability crunch, sources familiar with the matter told Bloomberg.

About 125 managing directors, including some in investment banking, are going to be fired as part of a round of layoffs that’s set to affect 250 employees at every level.

While the spokeswoman declined to comment any further, sources — who asked to remain anonymous since the matter isn’t public — told Bloomberg that managing directors have already begun to receive pink slips.

The latest reduction in headcount comes as deal values have fallen more than 40% to $1.2 trillion this year.

In September, Goldman handed pink slips to 1% to 5% of mid-level investment bankers in the US, London and China offices.

The cuts came after the Wall Street behemoth reported second-quarter earnings of $2.93 billion, precipitously lower than the second quarter of 2021, when the bank hauled in $5.49 billion.

Then in December, sources caught wind of an impending cut of as many as 4,000 “low performing” staffers — a week after Goldman reportedly slashed its struggling retail banking division by 400.

The bloodbath was dubbed “David’s Demolition Day” as word of the layoffs by hard-charging chief executive David Solomon spread throughout the firm’s headquarters in downtown Manhattan.

By January, 3,200 workers were removed from payroll — the most significant since Goldman culled its ranks following the 2008 financial crisis.

Robinhood to ax 7% of full-time staff in latest round of layoffs

Roughly 150 full-time employees are being laid off, according to internal company messages.

Online brokerage firm Robinhood Markets will reportedly lay off roughly 150 full-time staff — 7% of its total workforce — in its third round of layoffs in just over a year. 

According to an internal company message seen by The Wall Street Journal, Robinhood Chief Financial Officer Jason Warnick reportedly wrote that the cuts were being made to “adjust to volumes and to better align team structures.”

The reported layoffs come just five days after Robinhood acquired credit card firm X1 in a $95 million deal. Last year, Robinhood cut its total headcount by 9% in April and let go of 23% of its remaining staff in August as a decline in trading activity and subdued prices of equities and cryptocurrencies saw profit margins shrink.

The two cuts accounted for the loss of more than 1,000 staff.

At its peak, in the second quarter of 2021, Robinhood boasted 21.3 million active users and more than $565 million in revenue. Things have soured for the brokerage firm of late, with Robinhood’s Q1 2023 results showing a 44% decline in monthly active users and a 30% year-over-year decline in revenue.

Grubhub laying off 400 employees

Grubhub is laying off 400 corporate employees, about 15% of its workforce, amid higher costs and declining orders.

“We need to make some tough decisions in order to maintain our competitiveness, deliver the best possible service for diners and our other partners, and be successful for the long-term,” the food delivery brand’s CEO Howard Migdal said in a letter that was sent to staff this morning and posted to the Grubhub website.

“As a result, today we have made the very difficult decision to reduce headcount at Grubhub,” he said. “I know it will come as a shock to you.”

Affected employees are being alerted “the next several hours,” Migdal wrote in the letter, which was sent out at 8 AM ET, according to the company.

Reddit cutting 5% of its staff amid a stalled IPO

Reddit Inc. is cutting its workforce by about 5% and reducing its hiring plans, as the startup refocuses on future growth.

The online forum operator is eliminating around 90 full-time roles, according to a memo sent to staff by Chief Executive Officer Steve Huffman, seen by Bloomberg News. The company has around 2,000 full-time employees. Reddit will also reduce its hiring plans to 100 new roles, down from 300 previously.

“The team and I reviewed and adjusted our plan through the end of 2024,” Huffman wrote in the memo. “We’ve had a solid first half of the year and this restructuring will position us to carry that momentum into the second half and beyond.”

The tech industry has been slashing staff since last year after over-hiring during the pandemic. Technology companies have announced about 136,800 job cuts in the year through May, according to Challenger, Gray & Christmas, more than any full year since 2001. Reddit was one of the few holdouts that hadn’t yet announced any major staff reductions.

Microsoft to shed 10,000 jobs

Microsoft Corp on Wednesday said it would eliminate 10,000 jobs and take a $1.2-billion charge, as its cloud-computing customers reassess their spending and the company braces for potential recession.

 

Amazon to cut 18,000 jobs

 E-commerce behemoth Amazon.com has augmented its restructuring plans and will lay off 18,000 workers, higher than initially expected, the company said. 

The layoffs are higher than the 17,000 first reported late Wednesday and significantly greater than the 10,000 estimated in November.

The 18,000 cutbacks represent the largest at a major technology company thus far, and come on the heels of a planned reduction of roughly 8,000 jobs by software provider Salesforce.com (CRM). The layoffs also follow those of Meta Platforms (META), which plans to slash about 11,000 jobs,

Companies have been hit by a weakening economy and a sharp slowdown in digital ad spending, in addition to inflation and rising interest rates.

"This year's review has been more difficult given the uncertain economy and that we've hired rapidly over the last several years," Chief Executive Andy Jassy said in a blog post late Wednesday  He later added: "Between the reductions we made in November and the ones we're sharing today, we plan to eliminate just over 18,000 roles."

Amazon Stock: Notices Go Out Jan. 18

Jassy said the company doesn't plan to notify the affected employees until Jan. 18. He noted that one of the company's employees leaked information of the layoffs. That forced Amazon to speak out on the matter, Jassy said. The Wall Street Journal reported the cutbacks earlier in the evening on Wednesday.

"We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted. However, because one of our teammates leaked this information externally, we decided it was better to share this news earlier so you can hear the details directly from me." Jassy wrote.

Seattle-based Amazon first acknowledged in November it planned layoffs. The layoffs will concentrate on its device business, which includes the company's line of smart speakers. They will also focus on recruiting and retail operations, the Journal said.

The Journal also said Amazon employed 1.5 million people. The bulk of those workers are in the company's vast network of warehouses.