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In 2023, thousands of workers in big tech lost their jobs. Meta, Amazon, Google, Apple, Microsoft and Salesforce had been considered to offer good and secure jobs up to this point. Giants of the information and communication technology (ICT) sector, these companies are among the highest paying, with Eurostat data from 2022 indicating that workers in ICT had the second-highest median gross hourly earnings (surpassed only by earnings in the financial sector).1 These layoffs were a shock, especially as the biggest companies had hired extensively during the COVID-19 pandemic. What happened in the two years after this redundancy wave – was that the end of the cuts or did the companies start expanding again? 

While the job losses across the EU were unequivocally high in 2023, making news headlines for months, the trend in 2024 was less clear. In the first months of 2024, three of the big techs2 announced redundancies: Meta (the parent company of Facebook, Instagram and WhatsApp), Salesforce and Microsoft. In the second half of the year, Microsoft twice announced business expansions, while Amazon announced a job reduction. Most significantly, the numbers of jobs cut in the 2024 redundancies were much smaller in scale than the redundancies that took place in 2023. In addition, the redundancies were carried out more often at national rather than international level (see table).

Table: Big tech large restructuring events recorded in the ERM events database

2023

 

2024

CompanyJob effectsCountriesReason

 

CompanyJob effectsCountriesReason
Meta*-10,000IE, other EU and USCost saving and meeting targets Meta-94FRCost saving
Amazon**-9,000EU and USCost saving and company acquisition

 

Salesforce-700FR, other EU and USCost saving
Amazon-18,000EU and USCost saving and overhiring

 

Microsoft-1,900IE, other EU and USMerger with another company
Salesforce-7,900IE, other EU and USCost saving

 

Microsoft+400ROEconomic potential and availability of qualified staff
Microsoft-10,000FR, IE, PT, US and UKReduction in demand

 

Microsoft+550IEDeveloping AI and cybersecurity
Google-12,000IE, other EU and USCost saving and meeting targets

 

Amazon-400ROClosing an AI department

* Follow-up of a previous redundancy round announced in November 2022, cutting 11,000 jobs. ** Nine Amazon business expansions (one in 2023 and eight in 2024) have been excluded from this analysis since most of the jobs created are retail sector jobs rather than ICT sector jobs.

Notes: IE, Ireland; FR, France; PT, Portugal; RO, Romania.

Source: European Restructuring Monitor (ERM)

The impact of the redundancies and restructuring events in these two years varies across EU Member States. Ireland and France were worst affected, with at least three large restructuring events each. Germany, Portugal and Spain experienced one event each. Romania experienced both business expansion and reduction, notably in departments focused on artificial intelligence (AI).

Announcements alone don’t tell the full story

Big tech layoffs have increasingly been carried out incrementally rather than through single large-scale redundancy rounds. Since the European Restructuring Monitor (ERM) events database, the source of the data in the table, records announcements of large-scale layoffs only, this makes it difficult to know whether such incremental workforce size adjustments, or ‘right-sizing’, are taking place. Adjustments on a smaller scale are more difficult to capture and more likely to fly under the radar. Nevertheless, some information can be gleaned from the employee numbers provided by the tech giants in their annual 10-K reports submitted to the US Securities and Exchange Commission (SEC) for 2022, 2023 and 2024. Most of the reports provide their employee numbers at one point in the year, without specifying the company department in which employees work nor the location, complicating the possibility of providing insights on headcount change in the EU.

These reports show that Apple, which did not make any redundancy announcements, decreased its worldwide workforce by 3,000 between 2022 and 2023 but in 2024 returned to the 2022 level of 164,000 full-time employees.

Microsoft, despite announcing 10,000 job cuts globally in early 2023, grew its workforce both within the US and internationally from 221,000 employees in 2023 to 228,000 employees in 2024. This is an example of how big announcements do not always provide a full picture and how, despite the layoff announcement of 2023, Microsoft has been growing significantly.

Salesforce announced plans to reduce its workforce by 10% in January 2023. However, the exact countries affected and the number of jobs it was planning to cut in its international locations were not transparent. All that is known from the company’s announcements is that it planned to cut over 200 jobs in Ireland in 2023 and 170 jobs in France in 2024. When comparing the 2023 and 2024 Salesforce SEC 10-K reports, the workforce outside the US has been reduced by a much larger amount: 2,493.

Cuts affected white-collar jobs, especially in sales

The SEC 10-K reports together with the ERM also suggest which types of jobs will have likely been cut. Losses were felt across multiple departments, and sales and advertising departments suffered across all companies. The employee numbers published by Microsoft in July 2024 show that its sales and marketing division experienced the largest cuts. Amazon’s second redundancy announcement in 2023 cited cloud and advertising services among the departments affected. If not worldwide, at least in Ireland, Salesforce’s layoffs targeted similar departments – sales and customer success – and Google’s announcement also indicated the highest number of redundancies would occur in sales.

The impact of the changes may spill over beyond the core workforce of the big tech companies to affect their contractors, which arguably are an integral part of their business models. Although the cases are limited, there is evidence of this. For example, Accenture’s reason for a large-scale restructuring programme announced in July 2023 was that thousands of its employees were outsourced to Meta and Microsoft.

Nevertheless, including or excluding contractors, the computer programming and computing infrastructure sectors in the EU continue to have persistent labour shortages. According to the latest Business and Consumer Survey data from Q4 2024, 29% of employers in these ICT subsectors 3 mentioned labour shortages as a factor limiting production. There may be niche employers and start-ups that will be keen to engage workers dismissed by the big tech giants and their contractors.

What might lie ahead?

Big tech companies seem to have finalised the right-sizing exercise that they have been conducting since the end of 2022. While job cuts are still being implemented in the EU, one cannot at present speak of a wave of layoffs, as was the case in early 2023. In fact, some of the big tech giants have returned to a more stable path of recruitment in recent months.

A mix of redundancies and the creation of new positions can be expected from big tech companies in the EU for the foreseeable future, similar to pre-pandemic times. Internal reshuffling may also have an impact, meaning that companies will choose to expand or downsize certain units depending on current needs.


Image © Art-Park/Adobe Stock


Footnotes

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The European Restructuring Monitor (ERM) has reported on the employment impact of large-scale business restructuring since 2002. This publication series include the ERM reports as well as blogs, articles and working papers on restructuring-related events in the EU27 and Norway.

2 Aprīlis 2019
Publication Series

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