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Companies Like John Deere, Riachuelo, Amazon, Google, Microsoft, and Twitter Are Struggling with the Current Economic Scenario and Are Creating Mass Layoffs Worldwide. So Far, Over 55,400 Employees Have Been Laid Off, Leaving Many Brazilians Worried.
Companies like John Deere, Riachuelo, Amazon, Google, Microsoft, and Twitter have lost trillions of dollars in recent months, leading to a process of mass layoffs. Google, for instance, announced last Friday (20) the layoff of 12,000 employees globally, which represents 6% of its workforce. Two days earlier, Microsoft also confirmed the layoff of 10,000 employees.
The same is true for John Deere, Riachuelo, Amazon, Twitter, and Meta. Together, in just three months, these large companies have already laid off over 50,000 professionals.
John Deere Lays Off 85 Brazilian Employees
The agricultural machinery manufacturer, John Deere, which produces sugarcane harvesters and sprayers, located in the southwest of Goiás, announced the layoff of 85 workers. In a statement, the company states that contracts with these workers have already been concluded, as there was a defined term, and the process is happening as transparently as possible.
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The Metalworkers Union of Catalão (Simecat) reported that at the beginning of December 2022, John Deere planned to lay off about 200 of its employees due to a nearly 30% reduction in the volumes of sprayers produced from 2022 to 2023.
John Deere Explains the Layoffs
According to John Deere, the decline went from 2,550 to approximately 1,700, meaning that nearly 850 pieces of equipment stopped being produced, which brought the need to reduce personnel. Since then, several meetings have been held between SIMECAT and John Deere, where the entity proposed measures to avoid mass layoffs, such as the use of a time bank and layoff.
Although there was no consensus, shortly after the meeting, John Deere reduced the number of laid-off employees from 200 to 130. Carlos Albino de Rezende Júnior, president of the entity, managed to ensure the company did not lay off another 45 employees. These professionals will undergo job changes and use the time bank.
The executive emphasizes that he is still in meetings with the company to provide benefits to the 85 laid-off employees.
Group That Owns Riachuelo Stores Closes Its Doors and Lays Off About 2,000 Professionals
Another major Brazilian company to conduct mass layoffs in the country was Grupo Guararapes, which controls Riachuelo stores in Fortaleza. Earlier this month, it was responsible for laying off about 2,000 professionals from Guararapes Confecções.
The group states that its production will be focused in Natal, Rio Grande do Norte, however, data shows that those affected may not find quick reemployment in the labor market. The Group emphasizes in a statement that the mass layoff decision is part of the corporation’s strategic planning, aimed at optimizing manufacturing operations to enhance the diversity, efficiency, and competitiveness of the products.
Guararapes Confecções highlights that the company’s integrated business model remains unchanged, not impacting the supply chain in the country. The owner of Riachuelo states in a note that all employees who were laid off and affected by the company’s closure in Fortaleza will receive assistance and an extra package, such as support during this period. The industrial sewing machines were donated to seamstresses, and other employees were offered an additional month’s salary.
Enjoei Lays Off 31 Employees
The virtual thrift store Enjoei laid off 31 employees last Friday (20) as well. There was also an interruption of contracts with employees who worked under the legal entity regime. According to sources, due to the internal atmosphere of the company, the staff cut was already expected.
Although the layoff process was “smooth”, Enjoei did not provide any additional benefit package to those affected, unlike other companies. In a statement, Enjoei confirmed the layoffs, stating that the process is happening to align the projects and challenges for the upcoming years. The virtual thrift store also stated that the arrangement will allow for prioritization of some short- and medium-term projects.
Enjoei emphasizes that it remains focused on providing the best collaborative consumption solution for its two million customers and sellers and the most effective results for its shareholders, partners, and, of course, its professionals.
The company thanks the contribution of each employee leaving today and states that it will provide full support and assistance. When founded in 2020, Enjoei’s shares were defined at R$10.25 each at the bottom of the indicative range, and after just over two years, Enjoei’s shares have experienced a decline of more than 80%, closing last Friday’s trading session (20) at R$1.02.
Tech Giants Lay Off Nearly 55,000 Employees Worldwide
Giant companies like Amazon, Google, Microsoft, and Twitter are undertaking mass layoffs worldwide, with the number of affected individuals now reaching 55,400.
Twitter, after being bought by Elon Musk, undertook extreme layoffs of 3,700 employees. According to the company’s head of security and integrity, Yoel Roth, stated on November 4 that the layoffs affected about half of the employees.
The reduction in workforce affected about 15% of the security sector, with the frontline moderation team experiencing the least impact.
Elon Musk confirmed the mass layoffs, stating that unfortunately, there is no choice, as the company is losing over US$4 million per day. Everyone who left received three months of severance, which is 50% more than legally required.
Meta
On November 9, Mark Zuckerberg, CEO of Meta, announced the layoff of more than 11,000 employees, representing about 13% of its workforce, marking the largest cut in the company’s history. Zuckerberg emphasizes that the macroeconomic slowdown and increased competition have caused the company’s revenue to be much lower than expected.
According to Reuters, Meta, whose shares have lost more than two-thirds of their value, also plans to cut expenses and extend its hiring freeze until the first quarter of this year.
Concerns over expenses related to the metaverse, a parallel universe announced as the future of the internet, troubled the company’s investors. As of now, the metaverse unit, Reality Labs, has resulted in losses of US$9.44 billion in revenue, adding to the US$10 billion from the previous year. The company projects that losses will increase further in 2023.
Microsoft
On the 14th of this month, Microsoft announced it will lay off more than 10,000 employees by April and June of this year. This cut represents about 5% of the total workforce, according to the company itself.
In a note to the team, Satya Nadella, CEO of Microsoft, states that the tech giant is still dealing with a decline in the personal computer market following the end of the pandemic. The multinational is undergoing significant changes, and it is necessary to note that, despite eliminating jobs in some areas, it will continue to hire in key strategic areas.
Amazon
Earlier this year, Andy Jassy, CEO of Amazon, announced that the wave of mass layoffs in the company will continue and that more than 18,000 employees will be affected. Jassy states that the reviews leading to the layoff plan aim to prioritize what is most essential for customers and the long-term health of their business.
Amazon employs over 1.5 million workers, including warehouse staff, making it the second-largest employer in the U.S. This plan is not new, as last November the company planned to lay off around 10,000 employees in technology and corporate positions.
Alphabet (Google)
Last Friday (20), Google’s parent company announced a global mass layoff plan aiming to cut 12,000 employees, following the trend of other companies mentioned above, implementing a large-scale restructuring. The company’s measure impacts teams across the organization, including recruitment and some corporate positions, as well as some engineering and product teams.
The layoff represents about 6% of its workforce, according to Reuters. According to Alphabet’s CEO, Sundar Pichai, the company decided to reduce its workforce by about 12,000 employees in response to a distinctly different economic reality.
Understand the Real Reason for Mass Layoffs
Analysts view the layoffs at companies such as John Deere, Riachuelo, Amazon, Google, Microsoft, and Twitter as a combination of low sales, a pandemic decline, and fewer ads, given the current economic situation in the U.S.
According to Arthur Igreja, a technology and innovation expert and professor at FGV, many of these companies expanded in 2020, and in the following years, there was a decline. At the height of the pandemic, digitization surged. Everyone was at home, receiving government aid, and many people spent more online.
Thus, the big techs needed employees to support the demand, but this growth did not sustain itself after the easing of COVID-induced isolation. To give an idea, the previously mentioned big techs are in a bad moment and have already lost about US$4 trillion in market value in just the past 12 months.
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