Indeed layoffs: ‘Your position has been impacted’

You have probably read about the Indeed layoffs by now. The world’s largest job board has laid off 2,200 employees, or about 15% of its workforce. Its sister site Glassdoor also laid off 140 employees – about 15% of its total. Apart from the very real and painful impact on these ex-employees, the layoff is the first significant one for Indeed, which had until recently been growing like a proverbial weed in almost all the markets where it was present. Employees found out their fate via emails – those losing their jobs received an ominous message beginning “Your Position Has Been Impacted.” My condolences to those affected – this is not the kind of news you want to hear from Management.

So what’s up? The answer provided by Indeed’s CEO Chris Hymans for the Indeed layoffs was straightforward: “Last quarter, US total job openings were down 3.5% year-over-year, while sponsored job volume fell 33%. With future job openings at or below pre-pandemic levels, our organization is simply too big for what lies ahead.” In other words, too many people, not enough revenue. However, I suspect that it was also the case that Indeed overhired in reaction to revenue growth in 2021 and 2022. Responding to market conditions is an inexact science involving both analysis and guesswork – as many of Indeed’s customers would attest. A good part of Indeed’s growth in the past year was no doubt fueled by overhiring, particularly in the tech sector. Large employers such as Amazon and Apple appeared to be ‘banking’ tech talent – an action that they regretted as soon as the economy cooled ever so slightly. And then there was that rocky rollout of the CPA model. Hmm.

But – as they say on TV – ‘there’s more!’. Recruiting Holdings recently provided new guidance on their financials. They lowered their forecast for basic earnings per share, and also announced that operating income will drop 10% – $2.04 billion USD. The ‘restructuring’ (i.e., the Indeed layoffs) will cost the company an estimated $139 million USD during the 4th quarter – significant, but still relatively small for a company that produced $6.6 billion USD in revenue during Q3 2022.

What does this mean for the job board industry at large? First, now could be a time to hire some talented folks. Cuts were made in all areas, so people with skills ranging from sales to HR will be looking for their next opportunity. Second, given Indeed’s role as the leading job board, expect a possible contraction of funding as those outside the industry see the layoffs as a reason not to invest. Finally, if your business is directly competing with Indeed (for instance, perhaps you’re with LinkedIn or Adzuna), then here’s your chance to shine. Widespread layoffs tend to have a company-wide effect, even for those spared from the cuts. Indeed employees may be thinking more about retaining their jobs and less about gaining market share for the mothership. Company initiatives may be postponed or eliminated. And the resolute focus on goals – a longtime hallmark of Indeed – may be a little less resolute as folks look over their shoulders. In other words, Indeed’s own employees may be a little distracted. Let’s put it this way – if I were competing with Indeed, I would be ramping up some major initiative to take market share away from them!

It’s a bit ironic – the Indeed layoffs come mere months after Recruit received a $2.7 billion USD dividend from the U.S. subsidiary. I guess it’s always “So what have you done for me lately”, eh? Oh well…

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