High Tech Company Layoffs
January 20, 2023
The tech industry has become one of the most expansive and largest hiring fields in the past two decades, employing millions in a variety of positions.With the field of software engineering growing at an 100 percent increase from 2000-2010, Silicon Valley’s activity has only increased in companies ranging from Google to Zoom, attracting people from around the world. [1] However, in the past couple months, the “Big Tech Dream” has seemed to lose its appeal, as mass layoffs and hiring freezes occur in many companies.
Social Media companies, a substantial portion of silicon valley, have experienced some of the worst job cuts. For instance, Meta, owner of Facebook and Instagram, has recently laid off around 13 percent of its workforce, amounting to around 11,000 employees. Additionally, Twitter has seen cuts amounting to 50 percent since the beginning of November [2]. Snapchat similarly laid off 20 percent of its workforce in August. Other large companies such as Microsoft, Google, Youtube, and Lyft have recently announced halts to hiring, Microsoft stating their hopes for “more minimal” hires. [3]
The most prominent reasons for Big tech’s layoffs, include the nature of the boom and bust cycle, along with heavy inflation. Coming out of the Pandemic, companies have engaged in “overzealous expansion” from recent shifts in technological reliance. Companies such as Zoom, Netflix, and social media outlets peaked during the Pandemic, enabling large amounts of growth to the industry, imitating the “boom” period of its economic cycle. From 2020-2021, companies such as Alphabet, the owner of Google and Youtube, Apple, and Amazon had stock value increases by over 60 percent. [5] Consequently, said large companies began larger spending, increasing their workforce and new projects. Meta, for instance, whose value had gone past $1 trillion in 2021, doubled its staff and began its $10 billion project, the Metaverse. [4]
However, global inflation, with the result of falling stocks has ensued exponential loss of money for high tech companies. For example, in the past year, Meta stocks have dropped over 70 percent[3]. Elon Musk, the new owner of Twitter, stated that the social media service was losing around $4 million daily.
Although difficult to tell, said companies are estimated to remain “roughly flat” until the end of next year, leaving the industry’s hiring stagnant for the time being. Until then, companies attempt to stay positive, distributing “Layoff Guides” and ample severance after their cuts.
[1] https://www.bls.gov/opub/ted/2001/dec/wk1/art02.htm
[2] https://www.npr.org/2022/11/14/1136659617/tech-layoffs-amazon-meta-twitter
[3]https://www.nytimes.com/2022/11/09/technology/meta-layoffs-facebook.html?searchResultPosition=
[5]https://www.statista.com/chart/26575/tech-stock-performance/
