The Human Cost of Tech: Examining the Latest Layoffs
This article was originally published on Medium, on March 22, 2023.
Around mid-2020, the tech industry faced a horrible awakening due to COVID-19 causing economic upheaval. This has resulted in furloughs and layoffs, which have not been experienced in decades across many tech companies. Since January 1st, 2023, 533+ companies have announced layoffs, and in the first six weeks of the year, 101,657 workers were laid off in tech companies.
The biggest layoff comes from Meta, which laid off about 11,000 employees in November. Meta CEO, Mark Zuckerberg, announced that the company would have another round of layoffs, cutting another 10,000 jobs. In addition to these massive layoffs, the multinational technology conglomerate will close 5,000 job openings.
So far, 566 tech companies have laid off 168,582 employees in 2023 — Layoffs.fyi. April, 2023
The social media giant Twitter has only 1,300 active employees, as announced by its CEO, Elon Musk. When Elon bought Twitter for $44 billion in October, it had 7,500 employees. This suggests that 6,200 employees have been laid off since then. The layoffs have cut across all ranks, including top executives, with the intention of “stabilizing the organization,” as per Mr. Musk’s words.
At the end of January this year, more than 10,000 jobs were lost in eight days across six large tech companies, including IBM, Spotify, and Intel.
The American multinational tech company Amazon is cutting 9,000 more jobs after it announced that it was getting rid of 18,000 positions earlier this year. This is set to take place by the end of April and will be recorded as the largest layoff program in its history.
Microsoft had a recent layoff of 10,000 employees. This layoff caused the whole of the ethics and society team in the Artificial Intelligence organization to lose their jobs, amounting to 5% of its workforce impacted.
Dell has had a falling demand for its personal computers, according to Bloomberg News. This has caused the company to announce in early February its plans to lay off more than 6,650 employees or about 5% of its workforce. The headcount will be the lowest since 2017 after the reduction is complete.
Netflix, in a move to curb losses from dwindling subscription numbers, has laid off 150 employees in the first round of layoffs. The American company that offers streaming services announced that it laid off 300 employees in a second round of job cuts, amounting to 450 job cuts from Netflix, which accounts for about 4% of the company’s workforce.
Why are major tech companies resorting to layoffs?
In a statement, Netflix said, “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth.”
Microsoft, on the other hand, attributes its need for layoffs to change its hardware portfolio and the need to consolidate its office leases.
Amazon CEO Andy Jassy says in a statement, “Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and head count.”
Google CEO Sundar Pichai has described the layoffs as a necessary step to address the company’s past overhiring, which occurred two years ago. Sundar told employees that Google had “hired for a different economic reality than the one we face today.”
In conclusion, the major layoffs can be attributed to one, if not all, of the following reasons: inflation, higher interest rates, the economy, overhiring, and the COVID-19 pandemic correction.
It is noteworthy that some companies have maintained their workforce despite the significant challenges faced by the industry. Apple, the American multinational technology company headquartered in Cupertino, California has not had layoffs. Whether it is a good long-term strategy put in place or it is just Steve Jobs’s culture of being compassionate on his return to Apple that is deeply cultivated in the heart of the company, Apple has up-to-date avoided layoffs announcements. Other companies that have avoided recent layoff announcements include Nvidia, Cloudflare, and Palo Alto Networks.
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