Despite recently being named the most downloaded app globally, TikTok is no exception to a trend of layoffs taking place at tech companies.
The ByteDance-owned short-form video streaming platform is reported to have started laying off some of its staff in the US, and preparing to let go of workers in Europe.
On Monday (July 18) morning, some Europe-based employees were told to expect invitations to meet HR staff in the coming weeks, while some staff in the UK were also warned of job reductions in some departments within the company.
That’s according to a Wired report citing five people with knowledge of the process.
In the US, where TikTok is facing increasing criticism and even a potential ban, the Chinese company has reportedly informed some employees that their roles are being eliminated.
The Wired report was published around the same time that David Ortiz, TikTok’s Monetization Product Leader – and one of TikTok’s very first hires outside of China – said on LinkedIn that he is leaving the video platform.
“As tiktok / bytedance begin layoffs , I found out today that my role is being eliminated in a much larger re-organization effort.”
Ortiz, formerly at Snap, helped TikTok develop its engineering offices in San Francisco and Singapore.
“As #tiktok / #bytedance begin #layoffs , I found out today that my role is being eliminated in a much larger re-organization effort,” said Ortiz on LinkedIn.
In response to the reported layoffs, TikTok spokesperson Anna Sopel confirmed to Wired that the company is making adjustments to its staffing, but denied the changes amounted to a “company-wide restructure”.
“There are a small number of roles within the operations and marketing teams that shifted in focus, that can’t be called a ‘company-wide restructure,” Sopel said.
TikTok, which has recently attracted some music biz heat for not paying rightsholders via a ‘revenue-share’ royalty model, is among the many tech giants that are reported to be downsizing amid fears of an economic downturn as forecasts of global stagflation escalate.
TikTok is expected to triple its revenue this year to USD $12 billion.
In China, where TikTok was founded, tech giants including Alibaba and Tencent were also reported to have undergone layoffs and cost-cutting measures — despite recording strong revenues — as Beijing tightens its crackdown on the tech sector.
In the US, more than 28,000 workers in the tech sector have been laid off from the start of the year to mid-July, according to a tally by Crunchbase News.
Netflix in June said it laid off 300 employees as part of a second round of job cuts after it lost subscribers during Q1 for the first time in more than a decade.
Other notable tech layoffs this year, according to Crunchbase data, were carried out by Microsoft, Twitter, Coinbase, Robinhood, PayPal and Picsart.
Most recently, Bloomberg News reported on Tuesday, citing people with knowledge of the matter, that Apple intends to slow down its hiring and spending growth in some divisions in 2023.
The iPhone maker’s move comes as it seeks to exercise caution “during uncertain times,” the report said.
In the second quarter of 2022, Apple’s R&D spending rose to $6.39 billion from $5.26 billion, which it attributed to the increase in its headcount-related expenses.
But sources told Bloomberg that the company will no longer increase its headcount in some departments next year.
Normally, Apple hires 5% to 10% more in a given year, according to the report.
The report did not determine whether Apple Music is part of the layoffs. An Apple spokesperson declined to comment to Bloomberg.
“A lot of [tech] companies probably will disappear, but we should not think that the fundamental trends will [not] still remain, that technology and digitization will be important, new business models – these are the key themes that as business leaders, we all need to be very mindful of.”
Axel Lehmann, Credit Suisse
As layoffs rock tech companies, Credit Suisse chairman Axel Lehmann told CNBC at an event in May that a number of companies may disappear.
“A lot of companies probably will disappear, but we should not think that the fundamental trends will [not] still remain, that technology and digitization will be important, new business models – these are the key themes that as business leaders, we all need to be very mindful of,” said Lehmann.
Some analysts like Peter Garnry, head of equity strategy at Denmark’s Saxo Bank, have even pointed out that sentiment towards the tech sector is at its worst since the dotcom bubble in the late 1990s.
The Nasdaq 100 index, the benchmark index for the tech sector, rose 3% on Tuesday (July 19), but fell nearly 26% year to date as the tech rout of 2022 continues.Music Business Worldwide