LinkedIn, the business-focused social media platform owned by Microsoft, announced on Monday that it would be reducing its workforce by approximately 668, becoming the latest tech company to conduct mass layoffs. The company said the roles being cut span across engineering, product, talent and finance teams.
Adapting to changing business needs
In a blog post, LinkedIn said that the layoffs were a result of adapting organisational structures and streamlining decision-making. The company also cited the impact of the Covid-19 pandemic on its business as a factor.
“Talent changes are a difficult, but necessary and regular part of managing our business,” the company wrote. “We are committed to providing our full support to all impacted employees during this transition and ensuring that they are treated with care and respect.”
LinkedIn said it would offer severance pay, health insurance and outplacement support to the affected employees. The company also said it would allow them to keep their work devices and access to its online learning platform.
Tech industry facing challenges amid pandemic
This round of layoffs comes just months after LinkedIn laid off 716 employees in May, citing a change in its Global Business Organization. In the first half of this year, tech companies like Microsoft, Google, Meta and Amazon saw massive layoffs in part because the sector struggled to keep up with salary maintenance while revenue slowed down.
In January, Microsoft announced it would be reducing its workforce by 10,000 following a report showing company growth was at its slowest in six years. Part of that included advertising revenue that performed worse than expected. Microsoft’s advertising revenue partially comes from LinkedIn which makes money from ads on the platform in addition to users who pay a premium membership subscription fee.
Though LinkedIn saw revenue and website membership growth over the last year, it is slower than in previous years. In Q4 of 2023, the company’s revenue increased 5 per cent year-on-year – a drop from the previous quarter at 10 per cent. The company also laid off 716 workers in May, after growing massively during the pandemic. Around 40% of LinkedIn’s almost 20,000 workers were hired during the pandemic.
LinkedIn’s future plans
Despite the challenges, LinkedIn said it remains optimistic about its future and plans to invest in new areas of growth. The company said it would focus on expanding its presence in emerging markets, developing new products and features for its users and customers, and enhancing its social impact initiatives.
“We believe that by making these changes now, we will be able to accelerate our vision to create economic opportunity for every member of the global workforce,” the company said.
The cuts affect approximately 3 per cent of the total workforce at LinkedIn. The company has an estimated 21,000 employees – around 40 per cent of those workers were hired during the pandemic.
