Big Tech Layoffs
While the Covid-19 pandemic was a period of binge-watching Netflix and toilet-paper roll shortages, it was also a time where we witnessed a wave of digital transformation due to the heavy shift towards online services. During lockdowns, customers around the globe relied on e-commerce and other online activities to satiate their spending habits. Thus, in response to this surge in demand, tech companies over-hired employees. However, they did not anticipate that this surge in demand for popularized services would cool-down as customers returned to offices and their offline lives. Today, companies are correcting the hiring rush that happened in the tech industry during the pandemic at the expense of employees.
Working in companies across the tech industry was considered a sustainable career path. However, in an era of economic fluctuation it no longer appears to be so stable in the face of thousands of layoffs in big tech companies. Although January is not yet over, we are seeing layoffs overtake the tech industry even worse that the 1990s recession.
Google just announced that they will be cutting 12,000 jobs – that is 6% of their staff. Facebook plans to layoff 50,000 employees from their ranks. Microsoft are revisiting their core business goals 2020 digital-era spending; they already cut 10,000 of their workers as a result. Amazon has also “eliminated” 18,000 positions, which juxtaposes with their previous decision to almost double their workforce during 2020 pandemic lockdowns.
Other than correcting the hiring mania that happened during the pandemic; the increase in interest rates, high inflation levels and the fear of the economy going into recession has forced overstaffed companies to act. The uncertain state of the economy is predicted to cause a fluctuation in consumer spending with lower advertising investment in tech companies as a result. Thus, tech leaders are merely responding to the events of the world such as going back to face-to-face activities and possibly facing economic downturn.
Many predict that the worst is yet to come, however as of the first month of 2023, the widespread belief that there will be an unrelentingly rapid rise of internet services has already been disproven. Now workers across the globe are reaping the consequences.