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The nation is bracing for recession. The Federal Reserve continues to steadily raise its federal funds rate in an attempt to kill inflation, and many experts fear an economic downturn will be an unfortunate side effect of that campaign.
CEOs of major companies are especially worried that the economy will contract soon. A staggering 86% of chief executives polled in October forecast a recession in 2023. And they are wasting no time getting ready for hard times.
At least seven big companies recently have announced layoffs of 1,000 employees or more. Some of these companies are trying to restructure, while others appear to be getting lean and mean before a downturn potentially arrives.
Following is a roll call of the firms slimming their workforces.
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Amazon recently notified staff that the company plans to lay off around 10,000 employees. The cuts are expected to impact several divisions, including devices, books, human resources and stores, according to the Seattle Times.
The Times quotes an anonymous former employee who was laid off from the devices division as saying a manager told her and co-workers that their team had become a “little bloated.” Layoffs are expected to continue into 2023.
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Online used-car dealer Carvana is laying off 1,500 employees, or around 8% of its workforce.
In an email to employees, CEO Ernie Garcia said the company is cutting back due to economic conditions such as higher financing costs and delayed car purchasing.
According to reports, Garcia wrote to employees that the company “failed to accurately predict how this would all play out and the impact it would have on our business.”
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Networking firm Cisco Systems plans to shed more than 4,000 jobs, or about 5% of its workforce.
The cuts are part of a planned $600 million restructuring. However, the company notes that it will hire for new roles in the wake of the restructuring and plans to end its current fiscal year with roughly the same number of employees as before the layoffs.
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Information technology company Hewlett-Packard has announced layoffs that could see between 4,000 and 6,000 employees getting their pink slips over the next three years.
The job cuts are part of a plan to generate savings “through digital transformation, portfolio optimization and operational efficiency,” according to an HP press release.
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On Nov. 9, Meta Platforms Inc. — which owns Facebook, Instagram and WhatsApp — announced that it is laying off 11,000 staffers, or about 13% of its workforce.
In a letter to employees, CEO Mark Zuckerberg wrote that the move is designed to make Meta “a leaner and more efficient company.”
A hiring freeze will remain in place through the first quarter of 2023. By the end of next year, Meta will be “roughly the same size, or even a slightly smaller organization than we are today,” Zuckerberg wrote.
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Online payments firm Stripe said in early November that it was laying off roughly 14% of its staff. According to a CNBC report:
“Stripe said its head count will be reduced to about 7,000 employees, which means the layoffs will impact roughly 1,100 people. A Stripe spokesperson was not immediately available to provide the exact number of impacted employees.”
In a memo to employees, CEO Patrick Collison said the layoffs were necessary due to rising inflation, fears of an impending recession, higher interest rates and other factors.
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In perhaps the most publicized round of layoffs, new Twitter owner Elon Musk cut the company’s workforce significantly.
According to a CNN report:
“Musk appeared to frame the sweeping layoffs as necessary for a company that, like other social media firms, was experiencing ‘revenue challenges’ prior to his acquisition as advertisers rethink spending amid recession fears.”
The layoffs — and an estimated 1,000 resignations since Musk took over — mean Twitter’s employee roster has shrunk from 7,500 employees to about 2,700.
But the trend toward slimming down Twitter may be over. At least one report suggests that the company is now back in hiring mode.