Cloud and Automation Drive Massive Tech Layoffs Numbering Around 8,000 in 2017
Despite what has been considered overall a strong year for the tech industry, workers are not benefiting from those stock market gains. Thousands of jobs are being culled as the IT layoffs in the United States in 2017 are going to exceed 8,000. Many of these jobs are being replaced due to automation, which is a growing fear among many industries, as technology is increasingly able to occupy positions formerly staffed by human workers.
The shift toward cloud computing has also aggravated the situation because the transition from traditional IT platforms to the cloud has allowed companies to cut jobs. And in some cases, restructuring has led to more layoffs. Cisco Systems, Inc. (NASDAQ:CSCO), Oracle Corporation (NYSE:ORCL), and HP Inc (NYSE:HPQ) are among some of the largest IT companies in the U.S. and the world that have shed hundreds of jobs each this year alone.
Oracle Corporation Laying Off Over 1,000 Employees in Santa Clara and San Diego
Oracle filed a notice under California’s Worker Adjustment and Retraining Notification (WARN) regulations, revealing that 1,008 employees will be shed in its Santa Clara and San Diego offices.
The move comes as the company struggles to transition from a primarily software company into a software-hardware hybrid.
Many of the cuts are coming out of the teams that worked on the server and “Solaris” efforts, two projects that trace their origins to the Sun Microsystems, Inc. acquisition in 2010, which cost Oracle $7.4 billion. Oracle was interested in entering the server and microprocessor industries, but recent financial reports have shown that the transition has not been as successful as the company first anticipated.
A former Sun executive released a blog post following the layoff news that the cuts would be fatal to the Solaris project, meaning that Oracle may once more refocus on its software strengths, which could signal another loss of opportunity in the future for hardware engineers and others involved in hardware production.
This is hardly the first time that the hardware side of Oracle has been hit by layoffs. Last December, 450 jobs were slashed, mainly in the hardware division of the business.
The Oracle Corporation layoffs are another sign of the changing times in the IT sector, where the company is struggling to sell its high-end servers to customers who are instead flocking to companies like Amazon.com, Inc. (NASDAQ:AMZN) for massive public cloud data storage servers.
Xerox Laying Off 177 Employees in Webster, NY
Xerox Corp (NYSE:XRX) is also in the midst of a mass of layoffs that will be taking place from now until March 2018.
The Xerox layoffs will involve 177 employees losing their jobs, with 20 salaried positions being shed while the remainder are members of the industrial workforce.
Xerox has struggled throughout the year, with falling revenue throughout 2017.
“As part of Xerox’s strategic transformation, we continue to review our operations to improve efficiency and flexibility. This sometimes results in restructuring activities that affect all parts of the company, including warehouse operations in Webster,” wrote a spokesperson in an e-mail, according to Wirth Consulting, LLC.
Cisco Systems Laying Off 1,100 from Workforce Across the U.S.
Cisco Systems layoffs rank as some of the highest U.S. IT layoffs in 2017, with more than 1,100 jobs being shed as the company carries out a painful restructuring plan.
The 1,100 job cuts are in addition to the 5,500 jobs—about seven percent of the company’s total workforce—that have been culled since the announcement of the cuts in August 2016.
The company said that it plans to recognize hundreds of millions of pretax charges related to restructuring, which is not set to end until the first quarter of the 2018 fiscal year.
While Cisco has recouped some of its lost luster as it met or exceeded expectations on several recent earnings reports, the company’s long-term projection has been lowered, leading to a further degradation of the stock and the value of the company.
Hewlett Packard Enterprise Co. to Eliminate 5,000 Jobs
Hewlett Packard Enterprise layoffs have also helped to fuel the massive U.S. IT layoffs in 2017, as the company looks to eliminate 5,000 jobs, or about 10% of its workforce.
Hewlett Packard is struggling to adapt technological shifts like the preference for cloud computing among many companies and consumers today. Cloud has impacted several areas of HP’s business, forcing the company to institute these heavy layoffs in order to save on costs.
The company has been in the midst of slashing divisions since 2015 as it seeks to adjust to the changing tech landscape.
“With fewer lines of business and clear strategic priorities, we have the opportunity to create an internal structure and operating model that is simpler, nimbler and faster,” Chief Executive Officer Meg Whitman in an analyst call earlier in September.
On the same call, Chief Financial Officer Tim Stonesifer said the company is looking to save $1.5 billion over a three-year period.
Convergys to Lay off 406 in Lubbock
Convergys Corp (NYSE:CVG) is one of the more recent companies to experience large numbers of layoffs in the U.S. tech sector.
The Convergys layoffs will take place in Lubbock, Texas. In the company’s notice that it filed with the Texas Workforce Commission, it said that 406 employees will be cut by November 30.
The cuts are a result of the global outsourcing firm’s low call volume in 2017. Hundreds of Convergys employees in Arizona and Tennessee have already been given the axe while the company has struggled in 2017. This is a continuing trend from last year, when the company saw a 20% decrease in net income on flat revenue. In the first half of 2017, net income and total revenue have remained flat.
The cuts at Convergys account for the fifth-largest layoff in 2017 in Texas, according the Texas Workforce Commission.
Unisys to Lay Off 178 Workers as It Shuts Down a Client Services Center on Kenneth Drive in Henrietta
Unisys Corporation (NYSE:UIS) is also laying off workers. The Unisys layoffs consist of 178 jobs being shed from its Henrietta, New York client service center facility.
“The move is part of an ongoing initiative to streamline operations by consolidating work into a smaller number of facilities while maintaining uninterrupted quality of service to our clients,” said the company in a statement. “Rochester associates affected by this action can apply for any open position within Unisys for which they are qualified.”
The company said that it would provide outplacement service to laid-off employees who don’t want to apply for other positions at Unisys.
The company has been a large contributor to the U.S. IT layoffs in 2017—and for a long time before, shedding about eight percent of its workforce (1,840 jobs) several years ago.
The company reported that the move helped save it $205.00 million in annualized costs and another $230.00 million in annualized cost savings slated for 2017.
Despite the cost-savings effort, Unisys still finds itself failing to meet analysts’ earnings report expectations.
The workers in Henrietta provided end-users assistance with equipment or software issues.
Intel Laid Off 140 Employees, 100 from Santa Clara
The Intel layoffs also represent a tech behemoth having difficulty adjusting to the shifting times.
Intel Corporation (NASDAQ:INTC) has been cutting hundreds of employees from its Internet of Things (IoT) business. The company closed the Joule, Edison, and Galileo compute modules and boards. Those projects were designed to help give the company an inroad toward the IoT market, which has long been forecast as one of the next major developments in tech.
The company will cut 100 employees from Santa Clara, while a further 40 will be shed from its Leixlip, Ireland, office.
Citrix Systems to Lay Off up to 100 employees in Raleigh Region
Citrix Systems, Inc. (NASDAQ:CTXS) will also see as many as 100 employees cut from the Raleigh, North Carolina, region.
The Citrix Systems layoffs are another example of cloud computing impacting companies that are trying to adjust to the new platform. As they do, many positions that dealt with older platforms are being shed.
Citrix said it expects $60.0 million to $100.0 million in pretax restructuring charges, including about $55.0 million to $70.0 million from severance costs. The company expects to have most of its restructuring complete by the fourth quarter and during the fiscal year 2018.
“Oracle Cuts More Jobs in Its Hardware and Solaris Units,” Fortune, September 5, 2017.
“Confirmed: Oracle laid off 964 people from former Sun building,” The Register, September 12, 2017.
“Xerox to cut 177 jobs in Webster,” WHEC, May 18, 2017.
“Xerox to Lay-Off Employees in Webster, NY,” Wirth Consulting, May 22, 2017.
“Cisco to cut 1,100 more jobs amid a worse-than-expected business outlook,” CNBC, May 17, 2017.
“Hewlett Packard Enterprise Is Said to Plan About 5,000 Job Cuts,” Bloomberg, 21 ,September 2017.
“Unisys Corp. announces 178 layoffs,” Democrat and Chronicle, February 6, 2017.
“Intel axes 140 IoTers in California, Ireland,” The Register, July 5, 2017.
“WARN Act Listings,” Texas Workforce Commission, last accessed October 25, 2017.