In a rare move for the online retail giant, Amazon is laying off hundreds of corporate workers in its Seattle headquarters and elsewhere, according to a Seattle Times report.
The corporate cuts come after an eight-year hiring spree, taking the company from 5,000 in 2010 to 40,000 in its Seattle headquarters and gobbling up several retail businesses throughout the country.
However, according to the report, Amazon’s rising employee numbers over the last two years left some departments over budget and with too many staff on hand. In the last few months, the company implemented hiring freezes to stem the flow of new workers, cutting the number of open positions in half from the 3,500 listed last Summer.
The layoffs will mainly focus on Amazon’s Seattle office but there have already been cuts in some of its retail subsidiaries in other parts of the country such as the Las Vegas-based online footwear retailer Zappos, which had to lay off 30 people recently. And the company behind Diapers.com, Quidsi, had to cut more than 250 jobs a year ago.
The moves suggest Amazon may be trying to reign in spending and consolidate some of its retail businesses.
It’s important to note that cutting out a few hundred workers at a company with tens of thousands of employees is not unusual — and is pretty small in comparison to other established tech giants who’ve had to lay off far more recently. For instance, Microsoft had to lay off thousands of employees starting late last year — though most of those employees affected were outside of the United States.
The cuts also don’t indicate Amazon, which employs more than half a million people globally, has any intentions of cutting more or of slowing down its hiring practices elsewhere. According to its most recent quarterly earnings report, the company’s has upped its global workforce by 66 percent over the last year. Amazon currently has more than 4,000 job listings on its site for Seattle.
We have yet to hear back from Amazon about the latest report, but a spokesperson for the company told the Seattle Times the move was part of the company’s annual planning process and that, “We are making head count adjustments across the company — small reductions in a couple of places and aggressive hiring in many others.”
According to the report, several employees have already been told they’ve been laid off and those layoffs are expected to be completed in the next few weeks.
“For affected employees, we work to find roles in the areas where we are hiring,” the spokesperson said.
Akamai, the Cambridge Massachusetts content delivery network and network services provider, announced they had laid off 400 people in their earnings call with analysts yesterday.
On the call, Akamai CEO Tom Leighton indicated that the 400 people represented 5 percent of the the company’s 8000 worldwide workforce. “As part of our effort to improve operational efficiency, we reduced headcounts in targeted areas of the business, most notably in areas tied to our Media business. Overall, we have removed about 400 positions or 5% of our global workforce,” Leighton told analysts.
He went onto to say that the layoffs actually began at the end of last year and have spilled over into this week. The company sees this as part of an effort to get leaner and cut costs, an effort that predates Elliott Management buying a 6.5 percent stake in the company in December.
Elliott has a history of being an activist investor and a reputation for pushing companies to make big changes. In this case though, it appears the company was trying to find ways to reduce costs even before Elliott entered the picture.
A company spokesperson added, “The reduction in workforce is one part of a series of decisions to reduce cost as we continue to invest in areas to position Akamai for long-term success.”
This is a point that Leighton also made as he tried to temper the layoffs with news that the company plans to invest in other areas “It’s important to note that while we’ve made reductions in some areas of the business, we are also investing in areas that can return greater value going forward,” he said. These include areas like security and Internet of Things, markets that are still developing and there is room to exploit.
The company actually had a decent quarter, beating analysts expectations with revenue rising 8% to $663 million. The company stock is up $4.65 this morning or 7.30 percent, as of this writing.
Streaming music service Pandora is laying off about five percent of its employee base and taking “other cost-saving measures” in an attempt to save about $45 million annually. According to Pandora’s 8-K filing, employees were notified today of the plan and the company expects the staff reduction to be complete by the end of Q1 2018.
This is all part of an ‘organizational restructuring’ that will shift some resources to ad-tech and audience development. Pandora also announced plans to expand its presence and workforce to Atlanta.
With the expected $45 million in savings, Pandora plans to reinvest that money into ad-tech, non-music content, device integration and marketing technology. While Pandora has laid off some people, it will also hire for new roles.
“As I shared last quarter, we know where and how to invest in order to grow,” Pandora CEO Roger Lynch said in a press release. “We have an aggressive plan in place that includes strategic investments in our priorities: ad-tech, product, content, partnerships and marketing. I am confident these changes will enable us to drive revenue and listener growth.”
It’s crunch time for TrackR, that startup that lets you use an app to find items like keys, wallets and bags that have been tagged with its small Bluetooth-based tracking devices. TechCrunch has learned and confirmed that the company has laid off a substantial proportion of its staff, as it seeks to sharpen its focus amid a wider market contraction for item-tracking businesses.
The company did not confirm how many have been let go, nor how many are remaining in a statement that it provided to TechCrunch via a spokesperson:
“As TrackR’s strategy evolves, the organization needs to evolve, too,” it notes. “The recent rebalancing of TrackR’s workforce is to ensure the company remains efficient and focused on areas that will deliver on TrackR’s vision. The company is continuing to position itself to lead the item finding space.:
A source tells TechCrunch, however, there were 42 employees let go (a number also noted in this recent review on Glassdoor). LinkedIn lists just over 90 connected to the the company (including investors and board members), while PitchBook notes 35 employees, meaning that this could be more than half of TrackR’s staff.
The downsizing comes at a tricky time, both for TrackR and the wider space of device tracking startups.
From a high point of raising $50 million in August 2017 at a valuation of just over $201 million –investors included Steve Case’s Revolution Growth, Amazon (via its Alexa Fund), the Foundry Group, Docomo Capital and others — Trackr has had a series of stumbles, some unforeseen.
In December, Chris Herbert — who co-founded the company with Christian Smith in Santa Barbara after one of them lost a set of keys on the beach when surfing (the startup was originally called Phone Halo) — stepped down as the CEO (we believe Smith is still at the company as president). Herbert was replaced by COO Nate Kelly, who is now leading the company.
In the same period of time, natural disaster also hit the company, with the area where TrackR and its employees are based hit first by fires, and then mudslides. A separate contact told TechCrunch that the fire crisis was the reason for TrackR backing out of having much of a presence at this year’s CES — which is otherwise a major event for hardware companies.
The layoffs, which seem to have taken place in the last several weeks, are not the only ones in the device tracking market. Tile, TrackR’s closest rival, laid off dozens of employees in January after a disappointing holiday sales season.
TrackR has not cited sales problems for its own layoffs, and our original source for this story claimed it was more due to the company burning through cash too fast.
“They are calling it restructuring, but they are burning cash at an alarming rate,” the source said.
For what it’s worth, Amazon.com currently lists three TrackR products in its top-10 bestsellers in GPS tracking devices, two versions of its basic Pixel model for $19.99 and $49.99, and a 10-pack for $99.99.
Tile’s products do not make the top 10 (they appear elsewhere), but a look at the wider list, and the dozens of companies making similar devices at a wide range of price points, makes you realise just how crowded the market for these gadgets is today, and what kind of pressure that would put on those trying to claim leadership in the area.
TrackR to date has raised around $63 million and has been trying to differentiate itself by taking is tech outside of its own hardware.
Smith, the co-founder, has also spoken in the past about the company’s ambitions to go beyond its existing tracking of smaller items based on Bluetooth and mapping. One idea, he told me in November last year, was to expand to more enterprise applications, for example measuring and “tracking” how machines are working in factories using diagnostics connected to soundwaves (machines humming differently when they are broken versus when they are working) and other details of this kind. Whether longer-term plans like these are still possibilities in the current climate remains to be seen.
Eero, the mesh Wi-Fi router startup, has laid off 20 percent of its workforce (about 30 employees), TechCrunch has learned. Eero confirmed about 30 employees were let go but declined to comment on its total workforce size.
“Our goal is to provide perfect WiFi in every home,” an Eero spokesperson said in a statement to TechCrunch. “Over the past year we explored several related projects, and we’ve now made the tough decision to eliminate one new project in favor of greater focus on our core business. We do not take this lightly, and unfortunately this shift means about 30 colleagues will no longer be working at eero. We will continue our work to make eero the most reliable, secure, and easiest home WiFi solution.”
Personal finance startup NerdWallet seems to be on the struggle bus, having just laid off 53 people today (about 11 percent of its workforce) due to the fact that the company is not hitting its profitability goals, TechCrunch has learned. As part of the restructuring, NerdWallet’s sales and partnerships teams will be folded into various product teams, a NerdWallet spokesperson told TC.
The layoffs are happening as a result of NerdWallet’s revenue growth decreasing to market conditions. The company is missing its 2017 revenue projections, the company said. NerdWallet CEO Tim Chen sent an email to the staff this morning, notifying them of the layoffs.
“This was an incredibly difficult decision and not one we made lightly,” Chen wrote. “Two factors drove this decision — we’re not hitting our profitability goals, and there are areas within our organization that aren’t running as efficiently as they should be.”
In his email, Chen noted that while NerdWallet did grow this year, the company hit “some unexpected rough patches that impacted our revenue, which taught us an important lesson in budgeting more conservatively moving forward.”
This is the third round of layoffs at NerdWallet this year. In July, NerdWallet laid off six people from its marketing team. In April, NerdWallet laid off more than 40 people, which represented eight percent of its staff. As part of the changes in April, NerdWallet VP of growth Henry Hsu left the company and NerdWallet COO Dan Yoo moved into an advisory role.
In July, Chen told me NerdWallet was still growing and was financially strong. He also said there were no more planned layoffs in the foreseeable future. Clearly, things changed.
“This is the right decision for NerdWallet, but it’s also extremely painful,” Chen said in his email today. “We’re doing everything we can to support people during this transition and wish them the best.”
NerdWallet has raised $69 million in funding, with its most recent round coming in May 2015 from Institutional Venture Partners.
Here’s Chen’s full email to staff:
I have some tough news to share today.
As part of the 2018 planning process, the leadership team spent a significant amount of time evaluating our needs for next year and has decided to make certain, necessary changes to set us up for long-term success. Sadly, this means we will be saying goodbye to 53 talented Nerds, who have all contributed meaningfully to building NerdWallet. This was an incredibly difficult decision and not one we made lightly.
Two factors drove this decision — we’re not hitting our profitability goals, and there are areas within our organization that aren’t running as efficiently as they should be.
Profitability: Every year since NerdWallet was founded in 2009, we’ve exceeded our aggressive revenue targets. We got used to exceeding our goals, and it colored our judgment on how prudent we needed to be with our expenses in 2017. Although we did grow this year, we hit some unexpected rough patches that impacted our revenue, which taught us an important lesson in budgeting more conservatively moving forward.
Operational Efficiency: Our focus on growth in recent years caused us to focus less on certain areas of our business that haven’t been running efficiently. We need to streamline certain functions, speed up others, and put certain processes and infrastructure in place to scale effectively.
Both profitability and operational efficiency are critically important to the success of this company. They allow us to control our own destiny, invest in initiatives with the highest impact, think long term, and most importantly, serve consumers well.
Today isn’t easy, but I’m confident we’re making the right investments as we enter 2018. Our transition to a mobile-first, member-driven company is well underway and something we know consumers want and need. These investments complement the brand and assets we’ve worked hard to build, help us better serve the 100 million people who come to us for help every year, and will propel our next phase of growth.
I want to thank everyone for their hard work, dedication, and commitment to our business. Difficult as they are, these changes move us toward a better operating model and set us up for long-term success. This is the right decision for NerdWallet, but it’s also extremely painful. We’re doing everything we can to support people during this transition and wish them the best.
Verizon has initiated another round of layoffs as a result of its acquisition of Yahoo and subsequent combining of the company with its existing business property AOL to form a new division — called Oath, led by CEO Tim Armstrong. (Reminder: TechCrunch was owned by AOL which makes Oath our new parent company too.)
We understand the latest job cuts affect less than four per cent of Oath staff globally — which suggests fewer than 560 jobs are being cut in this round as it’s also our understanding that Oath has in the region of 14,000 staff globally at this point.
As well as being spread across the division’s global footprint, the job cuts affect different Oath business units — including ad sales, engineering and product development.
Yesterday Business Insider also reported that editorial staff had been affected at Oath’s UK business.
Verizon’s $4.5BN Yahoo acquisition closed in June. And just prior to that closing we confirmed that around 15 per cent of staff were being cut from the merged unit — or up to 2,100 jobs.
Adding in the latest round of layoffs, it looks like ~2,600 jobs have been lost so far as Verizon works to integrate the two businesses and merge their respective company cultures and media brands into a single, streamlined unit. No small task, clearly.
Asked for comment on the latest layoffs at Oath, a spokesperson provided the following statement:
Oath’s strategy is to build brands one billion users around the world love. We’re about four months post-close of Verizon’s acquisition of Yahoo, and we’ve made these changes to our team to further align our global organization to our 2018 roadmap. Oath remains committed to building a company talent loves and we continue to hire across our priority business units.