Mass tech layoffs continue in 2023, and companies such as Amazon, Google, Microsoft, Twitter, and Meta have announced several cost-cutting measures for the coming months. Mass layoffs tend to take on pandemic characteristics. Back in October 2022, nearly 9,600 tech jobs were lost. This is the most layoffs recorded since November 2020 in the industry. Tech companies are facing a slump in demand after two years of pandemic-induced growth during which they had been on an “aggressive” hiring spree. In the past three years, Amazon, Alphabet, Microsoft, Meta, and Apple have grown their workforces by a million workers.
According to El Pais, the five tech giants employed 927,000 workers in 2017, and the number will reach over two million in 2022. However, these companies have recently been carrying out mass layoffs. Amazon cut 18,000 layoffs or 1.2% of its workforce, Alphabet cut 12,000 layoffs or 6.4% of its workforce, Meta cut 11,000 layoffs (12.6% of the workforce), and Microsoft laid off 10,000 (4.5% of the workforce).
Hiring at full speed, but inflation kicked in
“Over the past two years we’ve seen periods of dramatic growth,” Google CEO Sundar Pichai wrote in an email to employees. “To match and fuel that growth, we hired for a different economic reality than the one we face today.” Back in November 2022, Mark Zuckerberg shared the following with Meta employees:
“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1”.
According to Zuckerberg: “At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that”.
The CEO of the other tech giants are on the same line, citing changes in economic conditions mainly due to inflation and rising interest rates while admitting to large-scale hiring and over-expansion at the start of the pandemic due to high demand.
Mass tech layoffs continue
Spotify is set to lay off thousands of employees as the tech sector continues to suffer from a recession. The popular music platform plans to cut 6% of its workforce, or about 588 of its 9,800 full-time employees. In recent weeks, Google’s parent company Alphabet said it would cut 12,000 jobs. Amazon has announced it will cut 18,000 corporate and technology jobs, the largest job cuts in the company’s history. Microsoft in January laid off 10,000 workers, citing economic conditions. The layoffs affected nearly 5% of Microsoft’s global workforce.
Intel is planning layoffs in 2023 as well, as some departments of the company, such as sales and marketing, are estimated to be cut by 20%. For now, Apple has not announced any plans for mass layoffs. However, the company has clarified that it is reducing recruitment, making only the necessary ones. According to a report released by outplacement services firm Challenger, Gray & Christmas in 2022, companies announced 1,235 CEO exits, down 8% from the 1,337 CEOs who left their posts in 2021. It is the lowest annual total since 2017, when 1,160 CEO exits were announced.
