LinkedIn, the business-oriented social media network owned by Microsoft Corp (MSFT.O), announced on Monday that it would cut 716 jobs and shut down its China-focused job application, InCareers, as demand wavers amid a weakening global economic outlook. The company, which has 20,000 employees, has grown its revenue each quarter during the last year, but is now joining other major tech companies, including its parent, in laying off workers.
In the past six months, over 270,000 tech jobs worldwide have been cut, according to Layoffs.fyi, which tracks the fallout. LinkedIn’s revenue comes from ad sales and subscriptions for recruiting and sales professionals who use the network to find prospects.
LinkedIn CEO Ryan Roslansky explained the decision in a letter to employees, stating that cutting roles in sales, operations, and support teams aims to streamline the company’s operations and remove layers to facilitate quicker decision-making. “With the market and customer demand fluctuating more, and to serve emerging and growth markets more effectively, we are expanding the use of vendors,” Roslansky wrote.
A LinkedIn spokesperson clarified that these vendors are “external partners” who will handle new and existing work. Roslansky also mentioned that the changes would result in creating 250 new jobs, for which employees affected by the cuts would be eligible to apply.
Regarding the decision to phase out the InCareers app in China by August 9, the company cited “fierce competition and a challenging macroeconomic climate.” LinkedIn will maintain a presence in China to assist companies in hiring and training employees outside the country, the spokesperson added.
Recent layoffs in the tech sector have primarily come from large companies, including 27,000 at Amazon.com Inc, 21,000 at Facebook owner Meta Platforms Inc , and 12,000 at Google parent Alphabet Inc. Layoffs.fyi reports that 5,000 technology jobs were eliminated in May alone.
Microsoft, which acquired LinkedIn for around $26 billion in 2016, announced 10,000 job cuts in recent months and took a $1.2 billion charge related to the layoffs.
The layoffs and InCareer’s phasing out are part of changes LinkedIn is making to its Global Business Organization (GBO) and China strategy.
Roslansky expects the fiscal year 2024 to “remain challenging.” He wrote, “We’re adapting as we have done this year and will continue to operate with the ambition we need to deliver on our vision and the pragmatism required to run the business well.”
In Microsoft’s latest quarterly earnings report in April, LinkedIn reported an 8% increase in revenue year-over-year. However, the company warned of a slowdown in hiring and advertising spending, expecting revenue growth to decelerate to the mid-single digits in the third quarter.
