Microsoft-owned LinkedIn said on Tuesday it will cut about 960 jobs, or 6% of its global workforce, as the coronavirus pandemic is having a sustained impact on demand for its recruitment products. The news comes ahead of Microsoft's fourth quarter earnings on Wednesday.
LinkedIn helps businesses and employees match one another but, with fewer companies hiring, LinkedIn's business has taken a hit, CEO Ryan Roslansky said in a blog post announcing the cuts.
"Our Talent Solutions business continues to be impacted as fewer companies, including ours, need to hire at the same volume they did previously," Roslansky explained.
Microsoft bought LinkedIn for $26.2 billion in 2016. It's Microsoft's biggest acquisition ever, though Microsoft had largely left LinkedIn untouched under former CEO Jeff Weiner, who stepped down from his position effective June 1.
As of February, LinkedIn represented almost 6% of Microsoft's total revenue and was one of the fastest growing Microsoft businesses. But, in its last earnings report, Microsoft warned that there was a slowdown in advertising spend in LinkedIn during the final weeks of the quarter as the coronavirus started to impact businesses around the world. The company is scheduled to report earnings for its fiscal fourth quarter on Wednesday.
Roslansky said LinkedIn plans to move two separate media businesses, including its LinkedIn Marketing Solutions and its Talent Solutions business, into a single entity so that LinkedIn doesn't have to "continue duplicating costly platforms, systems, and tools internally."
Jobs will be cut across LinkedIn's Global Sales and Talent Acquisitions organizations.
LinkedIn will begin to focus on online sales instead of in-person sales, with a new focus on its online storefront. "This online channel approach will allow us to better serve the millions of small businesses that will need LinkedIn through this pandemic and beyond—and aligns with how we plan to focus our field sales efforts on our higher value relationships," Roslansky said.
"Normally, we would have rolled out our annual plan at the end of June. But as I've shared at the Company All Hands, this year we've been taking our time to get the FY21 plan right given the changing dynamics around us."
Roslansky said these are the only layoffs planned for the company. Affected staff, who have not yet been told, would be able to keep company-issued cell phones, laptops, and recently purchased equipment to help them work from home while making career transitions, he said.
LinkedIn said employees affected by its job cuts will be informed this week and they will start receiving invitations in the next few hours to meetings to learn more about next steps.
"If you don't receive a meeting invite, you are not directly impacted by this change," Roslansky said.
Reuters contributed to this report.
Correction: This story was updated to reflect LinkedIn is merging its marketing solutions group with its talent solutions business.