Mass layoffs continue following growth during pandemic

Jani Avery

Jenny Craig Inc., Gap Inc., Microsoft Corp. and LinkedIn Corp. are among the new additions to the growing list of companies cutting the size of their workforce.

The layoffs come after businesses increased their hirings during the COVID-19 pandemic, when sectors such as retail generated more revenue as a result of increased spending from people working remotely. Additionally, economic uncertainty, especially with the declaration of a recession looming, is also a concern within corporations.

The unemployment rate was 3.4% in April while productivity fell by 2.7%, according to data from the U.S. Bureau of Labor Statistics.

Jenny Craig warned its employees of mass layoffs on April 27, urging them to begin searching for employment ahead of its filing for Chapter 7 bankruptcy.

The California-based nutrition company sent out WARN notices — which are required by U.S. labor laws to be sent 60 days in advance of a planned closing or layoff. The letters were sent to Jenny Craig locations, where at least 50 people would potentially be impacted, but it is unclear how many employees would be affected overall. 

“We’re currently transitioning from a brick-and-mortar retail business to a customer-friendly, e-commerce driven model and will have more details to share in the coming weeks as our plans are solidified,” a Jenny Craig spokesperson told Fox Business.

The company, which was founded in Australia in 1983, was bought in April 2019 by HIG Capital, a $55 billion private-equity firm, for an undisclosed amount. During that time, the company operated up to 500 locations — both owned by the company and franchised — throughout the United States and Canada.

The closing of physical stores is a post-pandemic shift felt across numerous industries, one where consumers either transferred to or accelerated their adaptation to digital transactions. Well known retailers have scrambled to pivot toward an e-commerce-style business model.

Gap is no exception, with a new wave of layoffs coming as well. 

Gap — the parent company of apparel brands like Old Navy and Banana Republic — will cut 1,800 corporate jobs by the end of July. This is in addition to the layoffs announced in September 2022, which cut approximately 500 positions. 

“We are taking the necessary actions to reshape Gap Inc. for the future — simplifying and optimizing our operating model, elevating creativity, and driving better delivery in every dimension of the customer experience,” Interim Gap CEO Bob Martin said in a statement, as reported by CNBC.

Gap Inc. estimates the cuts will save $300 million to its bottom line, annually.

In the technology sector, Microsoft announced 158 layoffs on May 10 within the company’s headquartered state of Washington. This reduction is in addition to the 10,000 people worldwide in the last layoff round on Jan. 18.

At Twitter, hundreds of workers left before layoffs reduced staff to about 1,000 full-time employees, including around 500 engineers, on May 3.

Overall, Twitter’s workforce is down by 90% from before Musk took over in October 2022. According to Fox Business, a former employee said that “performance reviews are constant,” resulting in frequent firings with little to no explanation given.

In a recent tally of layoffs in the technology sector published by CrunchBase, a long list of well-known household names is currently going through mass firings. 

Layoffs overall doubled compared to the previous week, thanks in part to Shopify Inc.’s announcement of a massive 2,300-person cut in staff on May 4. The e-commerce company slashed close to 20% of its total workforce. 

This is not the first time Shopify reduced its workforce, as it laid off 1,000 people, or 10% of its employees, in July 2022.

Reports in March shared that Salesforce Inc. is considering another round of layoffs, after it said it would reduce its workforce by 8,000 people or 10% in January.

Salesforce Co-CEO Marc Benioff said in January that the software company “hired too many people leading into this economic downturn” and took responsibility for that move.

Even LinkedIn Corp., the company that manages the job-seeking platform, announced a layoff of approximately 700 people in order to “manage expenses,” according to CEO Ryan Roslansky.

As of May 11, Inc. has laid off one of the largest number of workers in its third round of employment terminations since last year.

The e-commerce-focused technology giant laid off 10,000 employees back in November 2022 and repeated the action, affecting 8,000 people in January.

In a March 20 memo, Amazon CEO Andy Jazzy announced another layoff that would affect 9,000 employees, bringing the total number of the company’s laid-off employees to around 27,000 workers in less than a year. The company grew its workforce to 1.6 million people at the end of 2021.