In a move aimed at streamlining operations, Microsoft-owned LinkedIn recently revealed significant workforce reductions, laying off nearly 700 people across various departments.
The announcement, detailed in a memo obtained by CNBC, outlined the company’s decision to downsize its engineering, finance, and HR departments.
While the specifics of the restructuring remain unclear, sources indicate that the majority of the job cuts occurred within the engineering sector, with finance and human resources also affected. These lay offs reflect LinkedIn’s response to a decrease in year-over-year revenue growth, which has lasted eight consecutive quarters.
Challenges in Revenue Growth
LinkedIn’s revenue growth, a metric for any business-oriented social network, has seen a notable slowdown, increasing by only 5% in the second quarter. This trend contrasts sharply with the continuous growth in membership, which has surged over the past two years.
Microsoft, the parent company, acknowledged these challenges in July, prompting LinkedIn executives Mohak Shroff and Tomer Cohen to address the situation directly. In a joint statement, they emphasised the need for organisational evolution and their plan to achieve the business goals outlined in LinkedIn’s FY24 plan.
Microsoft’s Broader Cost-Cutting Measures
LinkedIn’s restructuring aligns with Microsoft’s broader cost-cutting strategy, which CEO Satya Nadella initiated in response to the company’s overall decline in revenue growth.
In January, Microsoft announced plans to reduce its workforce by 10,000 employees, with subsequent layoffs following in July. The recent reductions at LinkedIn, while significant, are separate from the earlier cuts, further showing the effort to optimise operations across the Microsoft portfolio.
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Ramping Up Hiring in India
Simultaneously, LinkedIn is ramping up its hiring efforts in India, a move reflecting the company’s commitment to growth in emerging markets. This expansion aligns with LinkedIn’s objective of fostering professional connections and opportunities on a global scale.
In summary, LinkedIn’s recent workforce reductions show a proactive approach to adapt to market challenges and enhance operational efficiency. These changes, coupled with ongoing investments, demonstrate LinkedIn’s resilience in navigating the evolving landscape of professional networking and reaffirm its commitment to delivering value to members and stakeholders alike.
Read the full memo here:
Team,
We did not expect to share this important update with you all in the midst of such challenging times, but in the spirit of creating clarity, Tomer and I wanted to share some news regarding changes we are making to our orgs.
As we continue to execute on our FY24 plan, we need to also evolve how we work and what we prioritize so we can deliver on the key initiatives we’ve identified that will have an outsized impact in achieving our business goals. This means adapting our organizational structures to improve agility and accountability, establishing unambiguous ownership, and driving improved efficiency & transparency through reduced layering.
These decisions result in the reduction of 563 roles across R&D. Broken down there are 137 Engineering management roles and 38 Product roles being reduced. Additionally, there will be 388 role reductions across our Engineering team in an effort to better align resources to our FY24 plan, and we will open a small number of new roles to fill critical gaps in our ambitious roadmap.
For those who are directly affected by these changes, you will receive a calendar invitation within the next hour, titled “Required Attendance: R&D Role Reductions”. This meeting will provide you with detailed information on how we will support you through this transition.
If you do not receive this invitation, expect communication from your Product or Engineering Executive leader soon with specifics pertaining to your organization and how we will collectively navigate through these changes.
Tomer and I made these decisions with deep consideration towards the long-term needs of our business and with the acknowledgement that every affected individual has played a valuable role in the growth and success of Linkedin.
In the coming days, our focus will be on supporting each other and discussing the ways we will move forward, with our vision, mission, and values as our guides. Today, it is imperative that we support our colleagues navigating this transition. Let’s continue to embrace empathy and understanding through these difficult times and use these as a cornerstone for the support we provide each other.
Mohak & Tomer
