Microsoft-owned LinkedIn is firing over 650 people, total tally this year crosses well over 10,000

LinkedIn announced a new round of layoffs affecting around 668 people within its engineering, product, talent, and finance teams. This decision comes as a response to the professional social networking platform’s continued struggle with sluggish year-over-year revenue growth, which has persisted for eight consecutive quarters.

In its quarterly revenue report released in July, Microsoft, the parent company of LinkedIn, reported modest revenue growth, with only a 5 per cent increase in the second quarter. This is despite consistent growth in LinkedIn’s membership over the past two years. To bolster revenue, Microsoft has articulated its intention to enhance its operations and give priority to key initiatives. These recent layoffs at LinkedIn are aligned with the company’s strategy for FY 24.

LinkedIn acknowledged the challenges of these talent changes in its official blog post, describing them as a necessary and regular aspect of managing their business. Approximately 668 roles are expected to be affected by these changes, spanning various departments such as engineering, product development, talent acquisition, and finance.

These layoffs at Microsoft’s LinkedIn subsidiary reflect a broader trend in the tech sector, where companies are grappling with slowing revenue growth and an uncertain economic outlook, leading to job cuts across the industry.

The recent layoffs at LinkedIn, which account for approximately 3 per cent of the company’s workforce, are in addition to the 10,000 job cuts that Microsoft had previously announced in January and July. The company’s overall revenue growth has experienced a decline in recent months, prompting CEO Satya Nadella to take measures to reduce costs throughout the organization and prioritize revenue generation.

In an official memo obtained by CNBC, LinkedIn executives Mohak Shroff and Tomer Cohen conveyed, “As we continue to execute on our FY24 plan, we need to also adapt how we operate and what we emphasize, so we can effectively deliver on the key initiatives we’ve identified as instrumental in achieving our business objectives. This involves refining our organizational structures to enhance agility and accountability, establishing clear ownership, and driving increased efficiency and transparency by reducing layers.”

Interestingly, even amid these layoffs, LinkedIn is reportedly increasing its hiring efforts in India, as indicated by an informed source. LinkedIn emphasized in its blog post, “While we are adjusting our organizational structures and streamlining our decision-making processes, we remain committed to investing in strategic priorities for our future and ensuring that we continue to provide value to our members and customers.”

It’s worth noting that the tech sector has witnessed a wave of layoffs in recent months, resulting in tens of thousands of workers losing their jobs. Major companies like Amazon, Meta, and Google have all announced job cuts, reflecting their preparations for a potential economic downturn. According to a report from the employment firm Challenger, Gray & Christmas, the tech sector has laid off 141,516 employees in the first half of 2023, a stark contrast to the approximately 6,000 layoffs recorded in the same period a year ago.

(With inputs from agencies)