By Bryan Jung
Job cuts in the tech sector have accelerated close to levels last seen in the first months of the pandemic, as the industry prepares for a downturn in the months ahead.
Big tech companies like Meta, Google, Amazon, Twitter, and Apple have all announced a massive number of layoffs and hiring freezes, according to a story reported by Bloomberg.
A slowdown in consumer spending, falling stock values, rising inflation, and a strong dollar causing a decline in exports have forced Silicon Valley firms to reduce their expenditures in recent weeks to save on costs.
Once a leading force in the world economy, tech companies are now facing a tighter situation, after benefiting from a major boom over the past decade.
The latest bear cycle has forced tech CEOs to be increasingly judicious on how much they are willing to spend to grow their companies, unlike in years previously to mollify their investors.
Key investors are demanding that the companies reduce operational expenses and halt unproductive projects, as they anticipate a looming recession.
Alphabet, Amazon, Meta, Microsoft, and others big tech companies have all reported shortfalls in their projections recorded in their quarterly earnings reports this year.
“We are beginning to see more job cut activity in the fourth quarter, historically when the bulk of cuts occur, as companies finalize budgets and plans,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, a job consulting agency,
“Many companies are anticipating a downturn, and with a still-tight labor market and the Federal Reserve’s rate hikes, more cuts will be on the way as we enter 2023.”
Panicked Tech Shareholders Demand Tech CEOs Cutbacks on Staff and Expenditures
Shares of big tech companies on the NASDAQ 100 have plunged and, in some cases, lost billions of dollars in their market valuations in the face of inflation and rising interest rates.
Worried shareholders facing another round of tech stock losses after an earlier plunge this year have been demanding more action from tech CEOs in recent weeks.
In response, Silicon Valley firms have announced major layoffs, new restructuring plans, and hiring freezes.
Lyft, Stripe, and Opendoor, for example, announced last week the layoffs of at least 13 percent of their workforces, according to Bloomberg.
That comes after Apple, Google, Meta, and Microsoft said that they would freeze hiring or reevaluate staffing needs as tech sector growth slows down.
Meta, which owns Facebook and Instagram, will be terminating thousands of workers this week after the failed launch of the Metaverse, The Wall Street Journal reported.
Bloomberg reported that Meta has lost more than 71 percent of its value so far this year, with investors becoming increasingly upset at CEO Mark Zuckerberg’s Metaverse fiasco.
On Nov. 4, Elon Musk’s announced his decision to fire half of Twitter’s workforce of 7,500 after he acquired the social media giant.
“Technology companies cut the most jobs last month with 9,587, for a total of 28,207 so far this year. This is up 162 percent from the 10,781 cuts announced during the same period last year,” reported Challenger.
This is the highest monthly total of tech sector layoffs for Challenger since November 2020, which records the announcement or confirmation of job losses reported by companies across multiple industries.
Despite the major layoffs during the pandemic, tech companies had actually benefited from it, owing to strong demand from services for employees working remotely at home.
Demand for products for remote work, food delivery, and social communications platforms led to significant growth during the lockdowns, but now the economic situation has changed.
Future Job Projections for Big Tech
Almost 104,000 tech jobs have been slashed so far in 2022, surpassing the roughly 81,000 losses in 2020, according to Layoffs.fyi, a tech industry jobs tracker, which uses different sets of data from Challenger.
This year may be an even worse year regarding job losses in the tech sector compared to the year of the pandemic, said Roger Lee of Layoffs.fyi.
The proportion of layoffs in 2022 is, historically, far from the massive cuts made at the end of, for example, the dot-com bubble of the late 1990s. The tech industry shed 168,395 jobs in 2001, followed by another 131,294 the following year, according to Challenger.
Many of the start-up firms that survived the burst of the dot-com bubble have grown into massive corporations with hundreds of thousands of employees.
According to Bloomberg, a contraction in the tech sector this time around would more likely be the case of large firms going through a phase of cost cutting restructuring rather than small start-ups going bust.
Despite the layoffs and shaky third-quarter corporate earnings reports in the tech sector, some economists still believe that the numbers reflect a strong overall economy for now.
However, they admit that other companies are not immune to the same issues that big tech is facing, as global demand from businesses and consumers is slowing worldwide.
Affiliate News Feeds
- Washington Examiner
- The Federalist
- The Epoch Times
- The Guardian
- The Gateway Pundit
- Judicial Watch
By Hans Mahncke News Analysis Late on Dec. 2, Elon Musk started the process of releasing thousands of internal Twitter emails. Musk, whose purchase of Twitter was completed on Oct. 28, had previously announced… [...]
By Naveen Athrappully France is banning short-haul domestic flights when there is a regular and frequent train option that takes less than two and a half hours, after a 2021 climate law, No… [...]
By Katabella Roberts House Minority Leader Kevin McCarthy (R-Calif.) vowed on Sunday that the fiscal 2023 National Defense Authorization Act (NDAA) will not move forward unless the military’s COVID-19 vaccine mandate ends. Speaking on Fox Business Network’s “Sunday… [...]
California lawmakers are once again poised to introduce legislation to tax Big Oil despite public backlash over a similar move earlier this year. [...]
The Supreme Court heard oral arguments Monday in a case about whether a custom webpage designer who disagrees with LGBT marriage can refuse to create a website for a same-sex… [...]
President Joe Biden is considering the idea of removing the COVID-19 vaccination mandate for U.S. service members, though he backs Defense Secretary Lloyd Austin’s continued support for the measure. [...]
Even corrupt corporate media are willing to acknowledge the risk of nuclear war is 'now a daily issue for the Biden administration.' [...]
A legal rep for the Loudoun County School Board engaged in witness tampering during an investigation into an alleged sexual assault. [...]
The attack on Lorie Smith is both authoritarian and unconstitutional. [...]
A recently discovered filing in a court case relating to Big Tech censorship revealed that the office of Arizona Secretary of State Katie Hobbs coordinated with Twitter to censor election… [...]
The Biden administration has claims it drained the heavily depleted U.S. Strategic Petroleum Reserve (SPR) in order to save the “global economy.” The White House’s International Energy Affairs adviser, Amos… [...]
To some, it’s an arcane discussion among constitutional scholars that reads like cement. To others, it’s a brazen grab for “runaway legislative power” by state lawmakers who say the U.S.… [...]
Labour-endorsed study finds initiative would save families thousands of pounds, cut benefits spending and raise tax revenuesFree universal preschool childcare and more funding for after-school clubs could increase government revenues… [...]
Union recommends members reject latest offer and adds 24-27 December strike but drops overtime ban Hopes of a deal to avert severe Christmas rail disruption were dashed on Monday night… [...]
PM caves in as up to 100 Tory MPs threaten to rebel, leading Labour to accuse him of putting party before countryRishi Sunak is to drop compulsory housebuilding targets to… [...]
Senator-elect Eric Schmitt, and current Missouri Attorney General, joined Sean Hannity on Monday night to discuss the federal government’s collusion with Democrat politicians to silence their conservative opposition. Currently, Missouri… [...]
It has been three weeks since four University of Idaho students were stabbed to death in a shared house near the campus and police still have not identified a suspect.… [...]
Kari Lake told Tucker Carlson on Monday night following the 2020 Arizona midterm election for governor that was awarded to Katie Hobbs. Previously, Tucker Carlson told Kari Lake that the… [...]