Block, the payments company co-founded by Jack Dorsey, is planning to lay off up to 10% of its workforce in an effort to streamline operations and improve performance. Dorsey believes that the company's headcount has grown too quickly and is now outpacing its growth and profitability. This has led to operational inefficiencies and frustration among employees and customers. Block, which processed $46.22 billion worth of transactions in a year, aims to reduce duplication and redundancy through performance management and restructuring.
In a similar vein, San Francisco-based e-commerce startup Bolt, previously valued at $11 billion, is also facing layoffs. The company is cutting over 100 employees, which accounts for 29% of its staff. The exact reasons for the layoffs and the affected teams at Bolt are unclear. Bolt specializes in a one-click checkout system and serves retailers like Kay Jewelers, Shinola, and Casper. The company has faced internal struggles and legal challenges, including a lawsuit from Authentic Brands Group. This is the third round of layoffs for Bolt within a year.
Meanwhile, TikTok, the popular social media platform owned by ByteDance, is also experiencing layoffs. The company is laying off 60 workers in its advertising and sales unit. The exact reason for the layoffs was not provided, but impacted workers have the opportunity to apply for other open positions at TikTok. TikTok, which has over 150 million users in the U.S., recently launched an e-commerce arm and marketplace. The tech industry as a whole has been shedding jobs, with over 10,000 job cuts this year, including at social media platforms like Discord and Twitch.
In addition to these layoffs, PayPal, the global payments company, is also cutting jobs. PayPal is laying off about 2,500 employees, which is approximately 9% of its workforce, in an effort to 'right-size' the company. The job cuts have already begun and will impact various roles within the company. PayPal CEO Alex Chriss stated that affected staff will be notified by the end of the week. This decision comes as PayPal faces increasing competition from rivals such as Apple, Zelle, and Block. Last year, PayPal announced a similar round of layoffs, cutting around 2,000 jobs.
Furthermore, Amazon, the e-commerce giant, is also implementing layoffs. The company is eliminating several hundred roles across Prime Video and MGM Studios. Additionally, Twitch, the live streaming platform owned by Amazon, is laying off more than 500 people. These layoffs at Amazon highlight the tech sector's climb down from COVID-era expansion. During the pandemic, Amazon's headcount grew by 310,000. However, as the disruptions of the pandemic eased, the company's prior investment decisions collided with slowing revenue growth and increasing cost pressures. Amazon's layoffs over the last several years amount to more than 27,000 cuts. Meta and Google have also implemented drastic layoffs. The trend of declining tech industry headcounts is likely to continue. The digital lives of consumers continue to change along with the next chapter of the US economy.
These layoffs at Block, Bolt, TikTok, PayPal, and Amazon reflect the challenges faced by tech startups and established companies in the industry. Slowing growth, frustration among employees, and operational inefficiencies are common issues that these companies are grappling with. The layoffs are seen as difficult decisions but necessary for the companies' obligations to their shareholders. The tech industry as a whole has experienced a wave of job cuts in 2023 and continues to face challenges in the new year.
Companies in the United States and Canada have started 2024 with significant job cuts across various sectors. The layoffs are a result of companies trying to rein in costs and uncertainty surrounding rate cuts by the Federal Reserve. Some notable layoffs include: Amazon, Alphabet, Microsoft, eBay, Unity Software, DocuSign, Snap, Salesforce, Cisco, Aurora Innovation, BlackBerry, SiriusXM, Bumble, Pixar Animation Studios, Sky, Los Angeles Times, Paramount Global, Business Insider, Bell Canada, PayPal, Block Inc, Citigroup, Morgan Stanley, Nasdaq, BlackRock, Estee Lauder, Wayfair, Macy's, Levi Strauss & Co, Hershey's, Nike, Lockheed Martin, Service, Piedmont Lithium, TC Energy, Enbridge, Tesla. The layoffs range from a few hundred to several thousand job cuts in each company.