New LinkedIn CEO Ryan Roslansky has come in at a tough time for the company, and after just two months in the top job, he's been forced to announce significant lay-offs at the professional social network due to the ongoing impacts of COVID-19.
As explained by Roslansky:
"To continue adapting and accelerating the company like we have been, we need to ensure we are focusing our efforts and resources against our most strategic priorities to set up the company for success today - and well into the future. When we took a hard look at the business, we decided we needed to make some hard calls."
Those hard calls relate, primarily, to the company's talent acquisition business - with fewer companies able to hire at the same volume that they have in the past, the demand is simply not there to sustain regular operations in this element.
The optimistic view, earlier in the year, was that the pandemic's impacts would be felt for a few months, but as the situation has continued to evolve, it's clear now that we'll likely be dealing with COVID-19 for some time, maybe even years, depending on how development of a vaccine progresses.
"After weeks of discussion and deliberation, the executive team and I have made the extremely difficult decision to reduce approximately 960 roles, or about 6 percent of our employee base, across our Global Sales and Talent Acquisition organizations."
The announcement underlines the compounding impacts of COVID-19, with more businesses, over time, feeling increased pressure due to the related restrictions. Again, the initial view was that we would be feeling the pinch in the short term, but the reality we're seeing now is a more prolonged battle, which is changing consumer behaviors, limiting spending, and ultimately, leading to a decline in economic growth.
Indeed, in the first quarter of the year, the US economy shrank at a 5.0% rate, which is the sharpest quarterly decline since the fourth quarter of 2008, in the midst of the global financial crisis. Similar impacts are being felt around the world, and logically, LinkedIn's recruitment business is also weathering those effects.
Roslansky says that LinkedIn will look to unify its Talent Solutions elements to streamline workload, while it will also shift to a new service model for small businesses, which puts more focus on online connection, as opposed to field sales teams.
"To drive customer value for small businesses, we've kicked off a very substantial product investment, including our products-and-services marketplace and a unified online storefront channel strategy. 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."
The changes make sense, and serve as a reminder of the impacts of the pandemic. LinkedIn, the platform, is seeing record levels of engagement and activity during the pandemic, but as a business reliant on ad revenue and recruitment solutions, it, like all social networks, will be hit by the ongoing situation.
As time goes on, the situation's only getting more challenging in many respects.