A surprising number of tech companies will most likely layoff thousands to tens of thousands of employees this year, according to first quarter analyses from Wall Street Insiders.
Overall, big names in tech like Google, Facebook, and Apple have enjoyed rising profits, as it is expected from this industry. However, the tech world is forever changing. Tech that was widely successful five years ago can end up obsolete tomorrow. Many well-recognized tech companies are feeling the wrath of innovation. Emerging trends in cloud technology and changing cyber security landscape have pushed a number of formerly glorious companies to the edge.
Let’s look at some of the companies poised to lay off employees and undergo “restructuring” in the upcoming months:
Almost anyone with a Windows computer knows what Symantec is. The iconic antivirus software maker has not had it easy in recent years. Symantec is expected to lay off about 2, 800 employees this year, which makes up about 15 percent of the company’s total workforce. The company experienced a six percent drop in its third-quarter revenue, which calculates to about a $900 million loss. Even worse, the net income for the company has decreased by an astonishing 23 percent. Symantec has already announced measures to “achieve greater profitability” in the coming years, meaning undertaking cost cutting measures.
Symantec is a victim of a larger shift in the cyber security landscape. Hacks and cyber attacks are increasingly becoming more sophisticated. Modern cyber attacks are conducted on a massive scale. Companies like Symantec have built business models based on deterring and fighting individually targeted attack. Clearly, that business model is no longer working.
Even if you may not have heard of it, EMC is a major player in the data storage hardware industry. Or at least used to be. Unfortunately for EMC, consumers are ditching data storage hardware en masse in favor of cloud storage solutions. EMC in recent years has lost business to cloud storage services like Amazon Web Services, Google, and Microsoft Azure.
EMC started cost-cutting measures in 2015. These measures will be implemented this year. The company plans to eliminate some $850 million from its yearly operational costs. As a result, between 10,000 and 14,000 employees will be laid off this year, amounting to about 20 percent of the workforce. EMC is also in talks to sell itself to Dell for a $60 billion asking price.
Another legacy player in the tech industry, Cisco announced recently that it would initiate 5,500 jobs and restructure the existing business model this year. Like EMC, Cisco has been losing market ground to Amazon and Microsoft. Cisco became a tech giant by selling networking hardware, which people are turning down in favor of cloud-based software. As a result, Cisco plans to restructure its decades-old business model to focus more on software solutions and services.
HP is reportedly laying off an astounding 30 percent of its workforce, amounting to about 14,000 job cuts. The company is on an accelerated path to cost cutting after years of struggling in the hardware business. The legacy tech company made the news last year for separating its PC and printer business from other enterprise software, hardware, and service businesses. HP is almost synonymous with PCs and printers. However, PC sales have steadily dropped marketwide in recent years. Budget consumers who preferred PCs in the past are now switching to smartphones and tablets. Companies like HP can no longer depend on hardware sales to bring in the revenue. Like Cisco, HP is depending on the services and software sectors to rake in the revenue.
VMware is also reportedly laying off a number of employees. It’s evident that legacy tech companies can only survive now by offering more software-based services.