As 2022 came to a close. A wave of layoffs hit many major US companies, and this trend shows no signs of slowing down in 2023. Like other US companies, Zebra Technologies is also significantly reducing the workforce in 2023.
The company announced to lay off around 700 employees. This amounts to over 7% of their workforce. The tech sector, in particular, has been significantly impacted by these layoffs. It’s witnessing employee reductions at a faster rate than during the pandemic.
According to data from Layoffs.fyi, a platform tracking layoffs. The tech companies cut more than 150,000 jobs in 2022 alone, a stark increase compared to 80,000 in 2020 and 15,000 in 2021.
This ongoing trend of layoffs in the tech sector reflects the challenges. Those challenges that companies are facing amidst economic uncertainties. It is a critical issue to watch as we move further into 2023.
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Is Zebra Technologies Laying Off Employees?
Zebra Technologies: Lincolnshire-based company is intended to reduce its global workforce by 7%. This reduction happened through voluntary retirement plans or buyouts. In their 2022 annual report, Zebra had around 10,500 employees.
Zebra is known for its barcode systems and handheld computers in manufacturing. It will provide severance and other benefits to encourage retirement-eligible workers to leave. They have yet to specify where these job cuts will be concentrated. But it is expected to happen among their approximately 120 locations.
Crain’s Chicago Business reported that Zebra currently employs 1,200 people in Lincolnshire.
Zebra Technologies is known for its disciplined approach as it manages expenses and investments with a long-term perspective. They believe this approach has contributed to their longstanding success, not only in these times but also during challenging times.
In short, Zebra Technologies specializes in technology. It enables real-time sensing, analysis, and action. It is often referred to as smart data capture. Their product range includes:
Mobile computers, tablets, software, thermal barcode labels, and receipt printers, among other innovations.
Why Is Zebra Technologies Laying Off Employees?
The reason behind this move is a noticeable drop in sales. This cutback is more substantial than initially anticipated for the company as it specializes in marking, tracking, and computer printing technologies.
All in All, Zebra Technologies is laying off employees due to a sharp decline in orders. This is why it announced it would let go of 700 workers. Many of whom are older employees.
These layoffs coincide with Zebra’s projection of a decline in net sales. It is noted that there is a 35% decline in net sales for the third quarter compared to last year. This announcement led to a more than 20% drop in their share price in early August. However, it has partially rebounded since then.
In their second-quarter report on August 1. Zebra disclosed a 17% decrease in revenue compared to the last year. But higher profits reported compared to the previous year when they suffered losses. This was attributed to sales with higher profit margins.
Zebra experienced a surge in business during the COVID-19 pandemic. Customers in retail and logistics sought systems to enhance efficiency. However, Supply chain issues resolve tight capital budgets. So customers are now reducing their orders.
Zebra emphasized their history of prudent management of expenses and investments. It enables their success during challenging times. They believe that these actions are necessary to reprioritize. Or to invest in parts of their business that will strengthen it for the long term.
The buyouts are expected to cost Zebra $45 million. This figure is to be recorded against earnings in the third quarter. Besides, according to Zebra’s statement, payouts will be completed by the first quarter of 2024.
When announcing second-quarter earnings, CEO Bill Burns expressed confidence in Zebra’s ability. Despite the downward revision of its outlook, it has capitalized on long-term trends toward digitization and workflow automation.
About Zebra Technologies
Zebra Technologies Corporation is a US-based company that specializes in mobile computing technology. They offer solutions for real-time sensing, analysis, and immediate action. It is often referred to as smart data capture.
Zebra’s product range includes: Barcode printers, scanners, RFID technology, handheld computers, and software for optimizing workflow. Their mission is to empower teams with the mobility and insights needed to excel.
Zebra has earned recognition for its innovation and dedication to its global partners. Notably, it achieved the top spot including:
Fast Company’s list of Best Workplaces for Innovators among large companies. Additionally, Zebra ranks fifth among the 100 best workplaces known for embracing innovation.
The company’s commitment to its partners has earned CRN a 5-star rating.
Zebra Technologies Locations In The US
Zebra Technologies Corporation has its corporate headquarters in Lincolnshire, Illinois. The company has 97 office locations in the United States. Some of the notable locations include:
- Holtsville, New York
- Agoura Hills, California
- Alpharetta, Georgia
- Austin, Texas
- Bentonville, Arkansas
- Buffalo Grove, Illinois
- Burlington, Massachusetts
- Eden Prairie, Minnesota
- Flowery Branch, Georgia
- Germantown, Maryland
- Greenville, Wisconsin
- Hauppauge, New York
- Kennesaw, Georgia
- Lincoln, Rhode Island:
- McAllen, Texas
- Memphis, Tennessee
- Merrifield, Virginia
What Other Companies Are Laying Off Employees?
Zebra Technologies announced layoffs recently. Besides, companies like Salesforce and Vimeo announced layoffs earlier this year. The most probable reason for these layoffs is the ongoing economic downturn. Moreover, sluggish sales are one of the key reasons behind these cuts.
This downsizing wave follows substantial workforce reductions. These reductions occurred last year at prominent companies. Amazon, for instance, made headlines in November 2022 by announcing layoff plans. It had laid off over 10,000 employees across various divisions. It marked the largest workforce cut in the company’s history. Twitter and Meta also experienced significant staff reductions.
Salesforce, led by co-CEO Marc Benioff. It has set the tone with a plan to lay off approximately 7,000 employees, which accounts for 10% of its workforce. This decision was part of a broader restructuring and cost-cutting initiative.
Vimeo, a prominent video platform, announced its second major round of layoffs. It is affecting 11% of its staff.
The financial sector has not been spared either. Goldman Sachs, a major investment banking giant, also laid off around 8% of its workforce. In January, this move was taken by the company. This move aligns with reductions seen in competitors like:
Morgan Stanley and Citi in 2022.
Tech companies have faced substantial workforce reductions recently in August. These companies include:
- Divvy Homes
- Sensor Tower
- NCC Group
- Mobile Premier League
- Astra, Discord
These companies are among those that have implemented significant layoffs in recent months. These cuts range from 4% to 33% of their workforce, affecting hundreds of employees.
The year 2023 has seen a substantial number of companies. Both in the tech and non-tech sectors, joining the layoff trend. Economic uncertainties and evolving market conditions forced these companies to make difficult decisions. It has impacted countless employees across various industries.
Zebra Technologies’ Stock Dropped
Shares of Zebra Technologies Corp. took a significant hit recently. After the company, known for its barcode scanners, drastically reduced its revenue outlook. Less demand trends have increased, and recovery is not expected throughout the year.
Zebra’s CEO, Bill Burns, noted a huge decline in demand beginning in the first quarter. Customers across various sectors and regions exhibited more cautious spending behavior. Notably, demand in retail, e-commerce, transportation, and logistics could have been better. As many customers are now absorbing the capacity, they expanded during the pandemic.
The stock price dropped by 17.3% to $254.77. Due to this, it became the leading decliner in the S&P 500. Besides, it marked the largest single-day selloff since February 28, 2022. It closed at its lowest price since December 28, 2022.
Third-quarter sales are expected to decline from 30% to 35% compared to 2022. This starkly contrasts the FactSet sales consensus of just a 4.1% drop to $1.32 billion. This projection factors in double-digit percentage declines in their core product categories. These trends may remain throughout the year.
For 2023, Zebra has revised its sales outlook to a decrease of 20% to 23%. This stark contrasts the guidance provided earlier in May, which indicated a decrease of only 2% to 6%.
Burns noted the impact of a notable reduction in near-term demand in the mobile-computing market and distributor destocking on this revised outlook.
He added that given the limited visibility in this uncertain environment, he is aware of and does not anticipate a recovery in 2023.
Despite the challenging sales outlook. Zebra reported a net income of $144 million, or $2.78 per share, for the second quarter through July 1. This marked a significant improvement from the loss of $98 million. Or $1.87 per share during the same period the previous year. Adjusted earnings per share fell to $3.29 from $4.61 but exceeded the average analyst estimate of $3.27. However, sales fell to $1.21 billion, missing the FactSet consensus of $1.31 billion.
Zebra’s ability to beat profit expectations while facing sales challenges reduced the cost of sales. It has dropped more than sales, resulting in an improved gross margin of 47.9% from 45.9%.
In the past months, Zebra’s stock has experienced an 11.4% decline. While the Technology Select Sector SPDR exchange-traded fund has seen an 18.4% rally, and the S&P 500 has gained 9.8%.
The Bottom Line
Zebra Technologies, a Lincolnshire-based company, announced to cut 700 workers. The reason behind this move is the company facing a sharp decline in orders.
The job cuts reduce its global employee headcount by 7% via buyouts or a voluntary retirement plan. The company still needs to disclose where the job cuts will take place. Zebra Technologies will offer severance packages to its affected employees. Besides, it is offering other benefits to get retirement-eligible workers to leave.
The layoffs are a significant reduction from the company’s previous estimate of 2% to 3% of layoffs.