LinkedIn introduced plans to dismiss more than 700 employees and shutter a Chinese version of the professional social media platform as the company weathers economic tumult.
CEO Ryan Roslansky told employees in a Monday message that the firm would implement layoffs in response to “shifts in customer behavior and slower revenue growth.” The headcount reduction will impact less than 4% of the nearly 20,000 employees at the company, which Microsoft acquired seven years ago.
“We’re expecting the macro environment to remain challenging. 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,” Roslansky said. “We will continue to manage our expenses as we invest in strategic growth areas, knowing that the foundations we are putting in place now for innovation, agility and scale are setting us up for the years ahead.”
LinkedIn will phase out InCareer, a version of the career platform meant for users in China, by the end of the summer while retaining employees of the company’s talent, marketing, and learning business units in the East Asian powerhouse. Roslansky said the platform, launched two years ago, had witnessed “some success in the past year” but also encountered “fierce competition and a challenging macroeconomic climate.”
InCareer has maintained 57 million members in China as the worldwide use of LinkedIn exceeded 875 million members as of last year, according to a website for InCareer.
American technology companies have long seen China as fertile ground for expansion. Beyond pressures from the Chinese Communist Party toward foreign technology entities to share user data and consent to censorship operations, the nation’s economy has languished due to aggressive lockdown measures and increased trade tensions with the United States.
The layoffs at LinkedIn nevertheless follow similar actions from other leading technology companies. Microsoft, Google, and Amazon previously revealed their intentions to decrease payrolls by more than 40,000 workers earlier this year. Fellow social media company Meta dismissed 10,000 employees and ceased efforts to fill 5,000 available positions after reducing payrolls by more than 11,000 workers.
The headcount reductions come as investors note that inflated payrolls and lower demand are preeminent factors behind lackluster profits. More than 139,000 workers have been dismissed from prominent technology firms in the first months of 2023, according to a report from Crunchbase, even after companies in the sector dismissed some 93,000 positions last year.
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Roslansky noted the advent of generative artificial intelligence solutions in his message and said that LinkedIn believes the social media platform is “more essential than ever to help our members and customers navigate the changes to access economic opportunity.” One recent forecast from Goldman Sachs estimated that AI could eliminate 7% of current jobs in the United States, largely in sectors that rely on white-collar office work rather than blue-collar professions.
Technology firms have seen AI solutions as a potential driving force for growth, prompting a race to implement generative AI innovations into products. Microsoft invested billions of dollars into OpenAI, the company which developed ChatGPT, and announced earlier this year that the system would be incorporated into search engine Bing. Google revealed one day later that Bard, an experimental conversational AI service, would soon be added to the company’s search engine, while workplace messaging company Slack unveiled new AI integrations last week.