These tech giants are still making money, but layoffs are coming hard and fast

From the U.S. to Europe and Asia, global tech giants from Microsoft and Google, to Amazon, SAP and more have laid off thousands of employees since the start of the year.

That’s despite most of these companies being profitable.

“Headcount reduction is a result of over hiring during the pandemic and a slower growth outlook than originally forecasted,” according to a report by financial services company Jefferies.

With interest rates and inflation remaining elevated, consumers are pulling back spending amid uncertainty in the global economy.

As a result, companies “need to reduce headcount in order to regain operating efficiency with a headcount that matches current demand trends,” the analysts at Jefferies said.

With interest rates rising, capital has become more expensive and companies started reining in their headcount costs.

“Particularly for startups, the surge in employment was partly fueled by cheap capital,” wrote a Bank of America Global Research report.

Here are some of the more prominent global tech firms that have axed staff despite earning big money.

Microsoft posted a net profit of $16.4 billion for the quarter ended Dec. 31, down 8% from a year ago. Its cloud business drove results, with Microsoft Cloud revenue at $27.1 billion, up 22% year-over-year.

The firm also delivered “record results” in fiscal year 2022 ended Jun. 30 despite a “dynamic environment,” CEO Satya Nadella said in the tech giant’s annual report.

“We reported $198 billion in revenue and $83 billion in operating income. And the Microsoft Cloud surpassed $100 billion in annualized revenue for the first time,” he said in the fiscal year 2022 report.

Despite that, Microsoft announced in January that it’s laying off 10,000 workers as the firm braces for slower revenue growth.

Google parent Alphabet announced in January it will be cutting 12,000 workers.

Germany’s SAP said it met guidance across the board for full year 2022, with cloud revenue increasing 24% from a year ago. The enterprise software company also returned to positive operating profit growth of 2%.

Singapore-based tech giant Sea Group reported net income of $422.8 million in the fourth quarter of 2022 — the company’s first quarterly profit since it started in 2019.

Days later, the Indonesian unit of Sea’s e-commerce arm Shopee conducted a fresh round of layoffs, affecting less than 500 full-time and contractual employees, according to media reports.

Last year, the company reportedly already cut more than 7,000 jobs — or about 10% of its workforce.

Other tech firms in Asia have not been spared either.

Indonesia’s GoTo Group, Singapore’s Sea Group, Carousell, Foodpanda and South Korea’s Naver and Kakao are some of the companies that have cut employees in the last few months.

The headcount reduction was conducted in an effort to “stay ahead of downturn impacts,” co-COO Jeff Clarke said in a memo to employees.

While fiscal year 2023 revenue improved, Dell’s operating income dipped 26% to $1.18 billion in the fourth quarter of fiscal year 2023 as demand for PCs and laptops slowed globally.

Apple has dodged mass layoffs so far, having hired at a slower pace than Google, Amazon, Microsoft and Meta.

The company reportedly delayed bonuses for some employees and limited hiring in March. Apple let go of contract staff in August, according to a Bloomberg report.

The iPhone maker missed expectations for revenue, profit, and sales for several lines of business in the first quarter of fiscal year 2023 which ended Dec. 31 last year.

CEO Tim Cook blamed it on a strong dollar, production disruptions in China, and macro headwinds.

This is not exhaustive list.