Joining the swelling ranks of tech giants walking through a rocky January, TikTok has just had its own round of layoffs, shedding approximately 60 employees, primarily from its sales and advertising divisions.
This move, attributed by the company to routine restructuring, comes with the growing economic anxieties gripping the tech sector.
While there are speculations about the exact reasons behind the job cuts, TikTok’s growth direction offers potential clues. Despite retaining its crown as the top entertainment app on iOS and having consistent presence among the top five free apps, the app’s user base expansion has slowed down. Compared to the 12% quarterly growth in 2022, year-over-year user additions reduced to 3% in 2023.
One potential contributor to these growing pains is the integration of TikTok Shop, the brand’s official move into e-commerce. Launched in September 2023, TikTok Shop has attracted user feedback on both ends of the spectrum: creators seeking affiliate commissions having products and viewers lamenting an influx of promotional content on their For You Pages.
Beyond internal challenges, TikTok faces the wider context of a sector-wide belt-tightening. Tech giants like Amazon, Google, and even smaller players like Duolingo and Discord have already implemented layoffs in 2024, extending the trend that began in the first quarter of 2023. Analysts attribute this wave of job cuts to various factors, ranging from a shift towards developing generative AI tools to general industry struggles in optimizing efficiency and appeasing shareholders.
Though not immune to these pressures, TikTok retains a strong global presence, with 7,000 employees in the US alone and operating under the umbrella of ByteDance, the world’s most valuable private company with over 150,000 employees worldwide. Still, the layoffs highlight the volatile economic sector, even for giants like TikTok.
The tech industry’s downsizing trend started in 2023, when there was a reduction of 260,000 jobs in the sector—the highest since the pandemic-induced layoffs. Meta CEO Mark Zuckerberg dubbed 2023 “the Year of Efficiency.” In 2024, over 10,000 tech jobs have already been eliminated, according to tech job tracker site layoffs.fyi.
Industry experts attribute the ongoing job losses to various factors, including workforce reshuffling for AI focus, lingering staff bloat from the pandemic, and companies aiming to enhance shareholder profits. Earlier this month, Amazon-owned Twitch also underwent layoffs, letting go of about 500 employees as part of an adjustment based on conservative growth predictions.
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