Discover the 7 companies that reduced their employees last week
Layoffs
January 15, 2024
Twitch, owned by Amazon, is planning to cut around 500 jobs, which is about 35% of its workforce. Despite being part of Amazon for nine years, Twitch is still not making a profit. The decision comes after the closure of operations in South Korea due to high costs.
Last year, Twitch laid off over 400 employees when its user and revenue growth fell short of expectations. Now, Amazon is extending its job cuts to the streaming and studio operations, affecting several hundred employees at Prime Video and Amazon MGM Studios in the Americas. This move is part of a broader trend of job cuts in the tech industry following the hiring surge during the pandemic.
Amazon's senior vice president of Prime Video and Amazon MGM Studios, Mike Hopkins, mentioned in an internal note that they are focusing on content and product initiatives with the most impact, leading to a reduction in certain investments.
The company, which invested heavily in its media business, including an $8.5 billion deal for MGM and a $465 million expenditure on the first season of "The Lord of the Rings: The Rings of Power" on Prime Video, is also planning to introduce ads on Prime Video and a more expensive ad-free subscription tier, similar to competitors like Netflix and Disney.
These layoffs come after widespread job cuts in 2022 and 2023 across various industries, with companies now re-prioritizing their resources. Amazon has recently cut jobs in its Alexa voice assistant division, while Microsoft also reduced staff in its LinkedIn professional network.
Amazon.com, Inc., founded in 1994 and headquartered in Seattle, Washington, is a global retail giant operating in North America and internationally. The company is divided into three segments: North America, International, and Amazon Web Services (AWS). Amazon engages in the sale of consumer products, subscriptions, and electronic devices like Kindle, Fire tablets, and Echo. It facilitates third-party selling through its platform, supports independent authors via Kindle Direct Publishing, and produces media content. Amazon also offers a variety of services, including fulfillment, advertising, and digital content subscriptions, while its AWS division provides cloud computing services. The company is known for its membership program, Amazon Prime, offering free shipping, streaming services, and more. Additionally, Amazon operates in the food delivery business in Bengaluru, India, and has utility-scale solar projects in China, Australia, and the United States.
C4 Therapeutics, a biopharmaceutical company focused on targeted protein degradation, has outlined its 2024 priorities, emphasizing key clinical programs and collaborations. To align with these goals, the company is restructuring its operations, resulting in a 30% reduction in its workforce. This decision aims to ensure the achievement of near-term milestones and position the company for future success.
Recent developments include securing additional capital of around $107 million, strengthening the balance sheet. Notable contributions include a $25 million equity investment from Betta Pharmaceuticals, a $10 million upfront payment from Merck, and $72 million in net proceeds from the company's at-the-market facility.
C4 Therapeutics anticipates achieving significant milestones in 2024, such as presenting updated data from Phase 1 trials for CFT7455 and CFT1946, as well as progressing its internal discovery efforts. Despite the positive momentum, the company acknowledges the impact on its workforce and expresses gratitude for their contributions.
Financially, as of January 5, 2024, the company holds approximately $330 million in cash, cash equivalents, and marketable securities. This, combined with expected cost savings from the restructuring, is projected to fund the company's operations into 2027.
These strategic moves and financial measures position C4 Therapeutics to advance breakthrough therapies, particularly in cancer treatment, while navigating the evolving landscape of biopharmaceuticals.
C4 Therapeutics, Inc., a biopharmaceutical company, develops novel therapeutic candidates to target and destroy disease-causing proteins for the treatment of cancer, neurodegenerative conditions, and other diseases. Its lead product candidate is CFT7455, an orally bioavailable degrader targeting IKZF1/3 for multiple myeloma, peripheral T-cell lymphoma, and mantle cell lymphoma. The company is also developing CFT8634, an orally bioavailable degrader of BRD9, a protein target for synovial sarcoma and SMARCB1-deleted solid malignancies; and BRAF V600E and RET programs for genetically defined resistant solid tumors. It has strategic collaborations with F. Hoffman-La Roche Ltd.; Biogen, Inc.; and Calico Life Sciences LLC. C4 Therapeutics, Inc. was founded in 2015 and is headquartered in Watertown, Massachusetts.
ChargePoint, a top player in electric vehicle (EV) charging solutions, shared news of a strategic reorganization to enhance financial performance and set the stage for sustainable growth. The move involves streamlining its global workforce by about 12%, aiming for long-term efficiency.
This restructuring will incur around $14 million in charges, with $10 million for severance and related costs and $4 million for facility-related expenses. However, it's projected to save approximately $33 million in annual operating expenses. The company's new CEO, Rick Wilmer, emphasized the decision as part of a comprehensive business evaluation, aligning with a focus on execution, operational excellence, and enhanced efficiency.
ChargePoint's financial standing remains robust, boasting $397 million in cash and equivalents at the end of Q3 2024, with access to an additional $150 million through an untouched credit facility. The company is dedicated to achieving positive non-GAAP adjusted EBITDA by Q4 2024.
Citigroup recently announced a significant workforce reduction, cutting 10% of its employees to improve the bank's financial performance and stock value. The New York-based bank plans to let go of about 20,000 workers over an unspecified "medium term," which typically means a three- to five-year period.
The decision comes as part of a broader restructuring led by CEO Jane Fraser, who took over in September to revamp the bank's operations. Citigroup, the third-largest U.S. bank by assets, has struggled since the 2008 financial crisis, lagging behind peers in controlling expenses and holding the lowest valuation among the top six U.S. banks.
Managers and consultants involved in the restructuring, codenamed "Project Bora Bora," initially discussed the 10% job cuts in November. The layoffs have been executed in waves, starting with top-level positions, and another round is scheduled for January 22, according to sources.
Citigroup incurred a $780 million charge in the fourth quarter related to the restructuring, with potential additional expenses of up to $1 billion in severance and other costs in 2024. The bank expects these measures to cut up to $2.5 billion in costs over time.
The bank's decision to cut jobs aligns with a broader trend in the U.S. banking industry to reduce costs, with Wells Fargo and Goldman Sachs leading the way in job cuts over the past year.
As a result of the layoffs, some Citigroup employees are proactively using vacation time or mental health leave to explore other job opportunities, anticipating thousands more job cuts in the coming years. The situation highlights the challenges faced by the bank and its employees during this period of significant organizational changes.
Citigroup Inc. is a global financial services holding company with a rich history dating back to its founding in 1812. Operating in North America, Latin America, Asia, Europe, the Middle East, and Africa, the company is divided into two segments: Global Consumer Banking (GCB) and Institutional Clients Group (ICG). The GCB segment serves retail customers through traditional banking, Citi-branded cards, and various financial services, while the ICG segment provides wholesale banking products and services, catering to corporate, institutional, public sector, and high-net-worth clients. Citigroup boasts a network of 2,348 branches, primarily located in the United States, Mexico, and Asia, offering a comprehensive range of banking, investment, and advisory services.
Playtika, the Israeli mobile games developer, is making significant changes in 2024. Reports from "Globes" reveal that the company is closing down several offices in Central and Eastern Europe, leading to the dismissal of 10% of its global workforce—400 employees, with most layoffs occurring in tech-related roles.
This move follows a similar downsizing in December 2022, where 600 employees, including 180 in Israel, were let go. In total, 20% of the company's workforce was cut during that year, despite previous profitable years, particularly during the Covid pandemic.
Recent developments include Playtika's acquisition of Israeli mobile games studio Innplay Labs in September 2022, a deal valued at around $300 million. However, earlier attempts to acquire Rovio, the company behind the popular Angry Birds game, were unsuccessful.
Notably, the layoffs are not anticipated to impact Playtika's 1,100 employees based in Israel. The company's strategic shifts and recent acquisitions may be influencing these workforce changes, and investors are advised to keep an eye on Playtika's stock for further insights into its future prospects.
Playtika Holding Corporation develops mobile games worldwide. The company owns a portfolio of casual and casino-themed games. It distributes its games to the end customer through various web and mobile platforms, such as Apple, Facebook, Google, and other web and mobile platforms and its own proprietary platforms. The company was founded in 2010 and is headquartered in Herzliya Pituarch, Israel.
Rent the Runway, a fashion rental company, is trimming its workforce by about 10% due to a slowdown in subscriber growth, as revealed in a recent regulatory filing. The company also disclosed the departure of COO Anushka Salinas, with CEO Jennifer Hyman taking on her responsibilities from January 31.
In a recent earnings release, Rent the Runway reported a 2% decrease in active subscribers, attributing it to strategic decisions on promotions and marketing spend to prioritize inventory and profitability. Despite this, CEO Jennifer Hyman emphasized that the acquired customers are more profitable.
Industry reports suggest a broader trend, with similar subscriber declines noted by other players like Stitch Fix. The CEO of Stitch Fix, Matt Baer, explained that they are focusing on high lifetime value clients to build a healthier client base.
A PYMNTS Intelligence and sticky.io report highlighted the importance of loyal subscribers in the retail industry, constituting nearly 80% of merchants’ revenue. However, economic challenges, such as ongoing inflation, are causing some clothing subscribers to consider canceling their memberships.
Rent the Runway anticipates charges of $3 million to $4 million for its restructuring plan, concentrated in the fourth quarter of fiscal year 2023. Despite the current challenges, the company is strategically adjusting its approach to adapt to industry dynamics and better serve its clientele.
Rent the Runway, Inc. rents designer wear for women through its stores and online retail. The company offers ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, ski wear, home goods, evening wear, and kids wear, as well as accessories. It also engages in the software development and support activities. The company was incorporated in 2009 and is headquartered in Brooklyn, New York.
SoFi, the Fintech giant, is in the news for staff layoffs despite a remarkable 116% stock market gain in 2023. The company is cutting about 7% of its workforce, roughly 300 employees, as reported by individuals on LinkedIn.
Analyst Ram Ahluwalia is bearish on SoFi, anticipating further challenges for the company. He predicts a $5 price target, signaling a significant drop from the current over $8 share value. SoFi's fourth-quarter and full-year 2023 earnings call is scheduled for January 29, 2024, at 8 AM, providing more insights.
In Q3 2023, SoFi posted a record adjusted net revenue of $531 million, marked by accelerated growth with 717,000 new accounts. Despite this, the company reported a net loss of $19.5 million and an EPS loss of $0.03 (excluding non-cash goodwill impairment). SoFi aims for positive GAAP net income in Q4 2023.
The layoffs raise questions about SoFi's financial health, and investors are advised to stay informed as developments unfold.
Social Finance, Inc., a finance company, operates an online platform that provides financial services. It offers student loan refinancing, private student loans, personal loans, auto loan refinance, home loans, mortgage loans, and investments, as well as insurance products for renters, homeowners, automobiles, and others. Social Finance, Inc. was formerly known as Credit-Linked Community Notes of Social Finance Inc. The company was incorporated in 2011 and is based in San Francisco, California with additional office locations in Healdsburg, California; and New York, New York.
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