The biggest technology corporations globally are witnessing tough times due to various economic factors. This has caused them to lay off on a massive scale. Almost none of the large-scale IT companies have been spared from taking such a drastic step.
The sector has seen some of the biggest tech layoffs in history over the span of only a few months, and some of the most important big tech corporations and startups are among the victims. Tens of thousands of IT workers and job seekers are experiencing anxiety due to inflation pressures and economic worries.
According to layoffs.fyi, a tracker of job cuts in the tech industry, has found out that over 24,000 workers among 72 companies across the tech industry have been laid off this month alone. The assessments are still continuing even as individual companies are struggling to lessen the impact on them.
Causes of layoffs in IT companies
Most of the companies announcing job cuts have mainly cited two reasons among other economic factors such as global inflation, lessening consumer spending, increased interest rates, and the dramatic effects of inflation on the world’s financial and economic markets.
The first among the two main reasons are the high cost of new employees that were hired in the 2020 online boom amidst the coronavirus pandemic. Now that employees are called to work in offices, these new employees are becoming expensive.
Secondly, economic uncertainty has forced companies to withdraw from spending on digital ads, a major source of revenue for IT companies. The cheap-money age of venture capital has come to an end due to high-interest rates.
Major Companies that have cut jobs
1. Amazon
The online retail and cloud computing giant have decided to lay off around 10,000 employees in the corporate and technology sectors. During this year’s autumn season, Amazon hired over 1.5 million full- and part-time workers globally. The layoff number would include 3% of the company’s corporate employees and a smaller portion of its entire workforce. The layoffs would mostly be from departments like the devices division, including Alexa, its retail and human resources divisions
The company has also announced freezing hiring for its corporate section.
2. Meta
11,000 employees were laid off by Facebook’s parent company, Meta, which accounts for 13% of its workforce. CEO Mark Zuckerberg reasoned extra hiring at the initial time of the pandemic. In a letter to his employees, he highlighted a drop in e-commerce, a general economic slowdown, more intense competition, and a drop in ad sales, the company’s main source of revenue. He wrote, “I got this wrong, and I take responsibility for that.”
For the record, the company has also heavily invested in Metaverse, a virtual-reality platform, which holds total uncertainty about its future.
3. Twitter
Multi-billionaire Tesla and SpaceX CEO Elon Musk announced mass layoffs as the first thing after he immediately bought the social media platform Twitter at the end of October. He first removed the company’s top leadership including its CEO, CFO, and top lawyer. These amounted to about 50% of the staff cut. “Regarding Twitter’s reduction in force, unfortunately, there is no choice when the company is losing over $4M/day,” Musk tweeted.
4. Microsoft
According to Axios, the American news website, the software giant made reductions last month across all of its departments. A source told Axios that fewer than 1,000 jobs were eliminated.
The confirmation of the layoffs was not given right away in response to an inquiry.
5. Snap
After Snap acknowledged laying off 20% of its workforce, or nearly 6,000 people, the value of its shares increased. The parent company of Snapchat also shelved a number of initiatives, including the Pixy photo-taking drone and its slate of Snap Originals premium programs.
6. Coinbase
Over 58 individuals from Coinbase Global’s recruiting and onboarding departments have been let go. The layoffs occur at a time when the entire cryptocurrency market has fallen as a result of the continued turbulence in the financial and economic markets. For the sake of increasing efficiency, Coinbase has announced job layoffs twice.
While there are still a big number of companies that have announced job cuts, companies like Apple and Google have majorly frozen hiring. Apple has slowed down hiring while Google might cut jobs in near future, as according to reports, it has discussed the same in its internal meetings.
