Why Big Tech Is Firing Employees By The Thousands

Since the end of the hiring pandemic, employees may have been laid off from tech companies

Durham (USA):

Tech companies are always on the news, often touting the next big thing. However, the recent tech news cycle isn’t dominated by the latest gadget or innovation. Instead, layoffs are in the title.

In last yearMore than 70,000 people globally have been laid off by big Tech companies – and that doesn’t take into account the downstream impact of contractors (and other organizations) losing business as budgets tighten.

What exactly led to this massive shedding? And what does it mean for the industry, and you?

What is damage?

Since the end of the hiring pandemic, a large number of employees have been laid off from major tech companies, including Alphabet (12,000 employees), Amazon (18,000), meta (11,000), Twitter (4,000), Microsoft (10,000) and Sales force (8,000).

Other household names that share the spotlight, include Tesla, Netflix, Robin Hood, Snap, Coinbase and Spotify – but their layoffs are significantly fewer than those mentioned above.

Importantly, these figures do not include layoffs downstream, such as ad agencies laying off staff as ad spend declines or manufacturers downsizing as orders rise. technology products reduced – or even potential layoffs haven’t come yet.

And don’t forget those who voluntarily leave because they don’t want to come into the office, hate their manageror don’t care”hard work” philosophy.

The knock-on effects of all of the above will be felt in the consulting, marketing, advertising and manufacturing space as companies reduce spending and redirect it. towards innovation in AI.

So what driver layoffs?

The canary in the coal mine has reduced ad spend and revenue. Many tech companies are funded through advertising. So as long as that income stream is good (especially was the case in pre-COVID years), so are employee costs. When ad revenue fell last year – partly due to concerns about global recession caused by the pandemic – layoffs are inevitable.

Apple is an exception. It strongly opposes the increase number of top people in recent years and the result is no reduction in staff (although it is inevitable that staff loss due to change work from home policy).

What does it mean for consumers?

While the headlines may be startling, the layoffs won’t really mean much to consumers. In general, the development of technology products and services is still expanding.

Even Twitter, which many people predict is deadsearching diversify it revenue streams.

That said, some pet projects like Mark Zuckerberg’s metadata likely will not be further developed in the way their leaders had originally hoped. Proof of this is in the layoffs, the focus (at least at Amazon, Microsoft, and Meta) in these big innovation gambles is made by senior leaders.

Over the past few years, low interest rates coupled with high COVID-related consumption have given leaders confidence to invest in innovative products. Beyond AI, that investment is either slowing down or dying.

What about those who lost their jobs?

Layoffs can be devastating for affected individuals. But who is affected in this case?

For the most part, those who lost their jobs were educated and highly employable professionals. They are being given severance package and support which often exceeds the minimum legal requirements. For example, Amazon specifically pointed out the loss will belong to the technical staff and the people who support them; not in stock.

Having a big Tech employer on their CV will be a real advantage as these individuals move into a more competitive job market, even if it doesn’t look like it. quite hot as many feared.

What does this mean for the industry?

With experienced tech professionals looking for work again, wages are likely to drop and higher levels of education and experience will necessary to secure employment. These adjustments in the industry are likely a sign that it is in line with other things, more established parts of the market.

The recent layoffs are eye-catching, but they won’t have much of an impact on the overall economy. In fact, even if Big Tech lays off 100,000 workers, that’s still only a fraction of the tech workforce.

The reported numbers may seem large, but they are often not reported as a percentage of total wage spending, or indeed total employees. For some tech companies, they just a small part among the large number of new employees initially recruited during the pandemic.

Big Tech is still a big employer, and its big products will continue to impact many aspects of our lives.

Nathalie CollinsSenior lecturer, Edith Cowan University; Jeff VolkheimerSenior Director, Continuity and Collaborative Technology, Duke Health, Duke Universityand Paul Haskell-DowlandProfessor of Cybersecurity Practice, Edith Cowan University

This post was reposted from Conversation under a Creative Commons license. Read original article.