LinkedIn cuts 700 jobs and exits China in the latest round of tech layoffs
Image credit: Photo 85539485 / Linkedin © Alexey Novikov | Dreamstime.com
The social media platform for professional connections has decided to downsize, following the example of its parent company, Microsoft, as well as other Big Tech players such as Amazon, Meta and Google.
LinkedIn has announced that it plans to cut 716 jobs and phase out its activities in China, in response to slowing revenue growth and changing customer behaviour.
The company's chief executive Ryan Roslansky delivered the news in a letter to staff published on Monday. He explained the layoffs as part of a plan aimed at responding to economic conditions and making the business more agile.
“In an evolving market, we must continuously have the conviction to adapt our strategy in order to make our vision a reality,” Roslansky said.
He added that the changes would actually result in the creation of 250 new jobs, for which LinkedIn employees affected by the cuts in the company's sales, operations and support teams would be eligible to apply. At the moment, LinkedIn has around 20,000 employees globally.
The changes are also expected to include the integration of some teams, as well as reducing management roles and broadening responsibilities “to make decisions more quickly”. As part of this restructuring, Roslansky said the product and engineering teams would be responsible for the technology roadmap of the company, while the business productivity team would be phased out and partly integrated into other parts of the business.
"As we turn 20, we are entering a new decade for LinkedIn, one that will perhaps be the most consequential we’ve experienced to date," he said. "AI is just beginning to accelerate changes in the global economy and labor market, and LinkedIn is more essential than ever to help our members and customers navigate the changes to access economic opportunity."
Roslansky said US-based employees would be entitled to severance pay, continuing health coverage and career transition services. The conditions outside the US would depend on other countries’ local requirements, he added.
In addition, LinkedIn's CEO also revealed it would phase out InCareers - the version of LinkedIn currently operating in China - by August 9 this year. At the moment, LinkedIn is the only Western social media application operating in the country, although it conducted a significant withdrawal in 2021, citing the growing difficulty of complying with the Chinese government’s regulatory demands.
Facebook and Twitter are banned in China, while Google pulled out in 2010.
"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," Roslansky wrote.
The job cuts are the latest layoffs to hit the tech sector in recent months. Over the past six months, more than 100,000 employees have lost their jobs at Big Tech firms including Google, Amazon, Meta, Twitter and Microsoft.
The widespread layoffs have been justified as part of the sector's reaction to unexpected financial challenges and contractions in the global economy in the post-pandemic world, as the cost-of-living crisis bites.
In January this year, LinkedIn's parent company, Microsoft, announced it would cut 10,000 jobs – around 5 per cent of its global workforce – in response to changes in customer behaviour. The firm also recently made headlines after launching a revamped version of its search engine Bing, powered by the popular AI chatbot ChatGPT.
The company has also recently clashed with UK regulators regarding the blocking of Microsoft's $68.7bn (£55bn) deal to acquire video game company Activision Blizzard. In the US, the Federal Trade Commission (FTC) has already sued to block the deal, while the EU is also currently investigating the merger and its potential anti-competitive repercussions.
Commenting on LinkedIn's announcement today, Laura Baldwin, president at IT training and learning firm O'Reilly, said: "It’s easy to get caught up in the news of the day, especially with so much coverage over tech layoffs recently. I believe tech companies are downsizing right now because their pace of hiring was too fast in the last few years and in order to hire during a very tight labour market, they overpaid for talent. The annualised cost of those decisions becomes very apparent and unsustainable, forcing those companies to reset.
“Meta, Salesforce, Tesla, Robinhood, Amazon, and many more have all recently announced layoffs. When there aren’t as many new jobs to jump to, employees tend to want to stay in their current positions. But that doesn’t mean you can stop re-recruiting and investing in your people. Quite the opposite.
“I think it’s important to focus on the long term and with the transformation that’s taking place in how people work coupled with technological disruption through generative AI, there’s likely to be a great deal of opportunity. If I look farther out, I’m optimistic that the change the world is undergoing right now will present a great deal of opportunities for the leaders that plan for it and position their businesses and teams for the future.”
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