TikTok has laid off around 60 staff, largely from its sales and advertising units, joining other digital companies experiencing a challenging January.
The company’s move, attributed to ordinary reorganization, coincides with rising economic anxiety in the tech sector.
While there are theories about the specific causes for the employment losses, TikTok’s growth trajectory may provide some insight. Despite maintaining its position as the top entertainment app on iOS and being consistently ranked among the top five free apps, the app’s user base growth has slowed. Compared to 2022’s 12% quarterly increase, year-over-year user additions fell to 3% in 2023.
The integration of TikTok Shop, the brand’s official foray into e-commerce, could be one of the reasons for these increasing pains. TikTok Shop, which launched in September 2023, has received user reaction from both sides of the spectrum: producers looking for affiliate commissions on products and viewers complaining about an avalanche of promotional content on their For You Pages.
Beyond internal issues, TikTok is facing a broader context of sector-wide belt-tightening. Amazon, Google, and even smaller firms like Duolingo and Discord have already announced layoffs in 2024, continuing a trend that began in the first quarter of 2023. Analysts attribute the wave of job layoffs to a variety of issues, including a shift toward building generative AI tools and broader industry struggles with efficiency and shareholder satisfaction.
Despite these difficulties, TikTok maintains a large global presence, with 7,000 employees in the United States alone, and is part of ByteDance, the world’s most valuable private firm, which employs over 150,000 people globally. Nonetheless, the layoffs reflect the uncertain economic sector, even for giants like TikTok.
The tech industry’s downsizing trend began in 2023, with a drop of 260,000 jobs—the biggest since pandemic-induced layoffs. Meta CEO Mark Zuckerberg has dubbed 2023 “the Year of Efficiency.” According to layoffs.fyi, approximately 10,000 tech jobs will have been destroyed by 2024.
Industry experts attribute the continuous job losses to a variety of issues, including labor reshuffling for an AI focus, lingering staff bloat from the epidemic, and corporations seeking to increase shareholder profitability. Twitch, which is owned by Amazon, also laid off approximately 500 staff earlier this month as part of a restructuring based on cautious growth projections.