LinkedIn disclosed late Tuesday that it would slash around 960 jobs, or 6 percent of its global headcount, as the ongoing health crisis deals a heavy blow on demand for its recruitment services. The news comes ahead of Microsoft's fourth-quarter earnings report on Wednesday.
The professional networking site helps businesses and workers suit each other, but LinkedIn's market has taken a hit with fewer companies recruiting, Ryan Roslansky, chief executive officer, said in a blog post announcing the retrenchment.
LinkedIn, headquartered in California, helps employers evaluate the suitability of an applicant to a position, and workers use the site to find new jobs.
Job reductions will be carried out across the company's sales and hiring units globally. In announcing the program in a message posted on LinkedIn 's website, Roslansky said the company will provide U.S. employees with at least 10 weeks of separation pay including health benefits for one year and would recruit laid-off workers for newly formed positions.
Roslansky said LinkedIn had to concentrate on strategic goals, and that as executives examined their activities, they no longer wanted a number of positions due to overlap or a change of approach.
The organization currently supports, for example, independent talent marketing companies, which will be united on one platform. It also plans to support online SMB customers by field sales teams, instead. Across the globe, LinkedIn offers six months of healthcare coverage or the monetary equivalent in group premiums where applicable based on local plans and policies.
Microsoft purchased LinkedIn in 2016 for $26.3 billion. It was the biggest acquisition ever made by Microsoft, although it had previously left LinkedIn untouched under former chief executive Jeff Weiner, who stepped down from his role effective June 1.
Through February, LinkedIn accounted for about 6 percent of Microsoft's overall sales and was one of the tech giant's fastest-growing sources of revenue. Yet, in its last earnings report, Microsoft warned of a slowdown in ad spending in LinkedIn during the quarter's final weeks as the coronavirus started to affect companies around the world.
As lockdowns to contain the disease have hit businesses around the globe, LinkedIn's business has been affected as companies terminate or furlough their personnel or sharply reducing hiring.
LinkedIn disclosed that workers affected by the retrenchment will be notified this week and they'll start receiving invitations to meetings to be informed about the next steps. "If you don't get a meeting invite, you're not directly impacted by this change," Supantha Mukherjee of Reuters quoted Roslansky as saying in her report.
