Tech layoffs nearing levels not seen since the Great Recession
12/01/2022 / By Arsenio Toledo
The number of people fired from Big Tech companies this year is nearing annual levels not seen since the Great Recession.
The worsening economic situation in the United States has made Big Tech companies turn to mass layoffs as a way of making sure their profit margins remain stable. In November alone, more than 50,000 workers in tech lost their jobs, up from 12,600 in October. (Related: Mass layoffs incoming: 50% of employers plan to cut jobs in the next 12 months.)
By comparison, about 65,000 tech jobs were lost in 2008, and around the same number of tech jobs were lost in 2009. It remains to be seen whether the magnitude of this year’s tech mass layoff will approach the levels only previously seen when the dot-com bubble burst, wherein nearly 300,000 tech jobs were lost between 2001 and 2002.
But Silicon Valley experts noted that during the dot-com bubble burst, many of the companies that failed back then were not “real” companies.
“The dot-com bust was, primarily, if not exclusively, companies that had no customers or revenues,” said Stephen Levy of the Center for Continuing Study of the California Economy. “The companies that are laying off, like Amazon, or freezing hirings, like Google or Apple, have millions and millions of customers and are profitable.”
This time, the analysts added, many of the tech firms that are laying people off may have grown too quickly and may need to reset.
Thousands from Big Tech companies and startup firms laid off in the past few months
Globally, nearly 210,000 people from hundreds of different tech firms have been fired this year as of Dec. 1.
In the U.S., Meta, formerly Facebook, and Amazon have received the most publicity with their five-digit layoffs. Meta recently announced that it was firing over 11,000 workers, while Amazon was firing around 10,000.
They are followed by information technology giant and electronics manufacturer HP, which announced a mass layoff involving around 6,000 people. HP is followed by Twitter which, following its acquisition by Elon Musk, saw over 4,400 contract workers and around 3,750 full-time employees fired within just a few days of each other.
Other notable tech firms that are firing thousands of workers include Cisco, Better.com, Seagate, Katerra, Zillow, Instacart, Microsoft, DoorDash and Kraken.
“These are very salient layoffs, even if they don’t affect that many people and are actually quite contained to tech and closely related industries,” noted Julia Pollak, chief economist at ZipRecruiter. “They are loud. They are very public. They’re talked about all over social media.”
On ZipRecruiter, just four percent of job seekers’ most recent work experience was in the tech sector, but over 20 percent of job seekers want to work in that industry. Pollak noted that this is because even workers with backgrounds outside of tech are keen to get into the industry – but the recent wave of layoffs may be diminishing people’s chances.
“They’re looking at a way to get into this industry, and they’re seeing the opportunities shrink,” she said. “That’s one reason why these layoffs, even though they’re relatively small, have a chilling effect on everybody.”
“The tech industry is wrapped up with our economic aspirations as Americans. It’s the iconic industry, like the auto industry was for Detroit way back when,” Pollak added. “It’s sort of the bellwether industry that shapes our moods, and a slowdown there is causing jobseekers more broadly to worry jobs are becoming less available.”
Read the latest news about the tech industry at BigTech.news.
Watch this video and learn about what it means for tech employees when Big Tech companies are laying off thousands of people during a tech worker shortage.
This video is from the Mathematical Software channel on Brighteon.com.
More related stories:
Twitter moderator fired by Musk expresses “worries” about potential free speech future of platform.
Amazon to fire 10,000 employees in biggest layoff in company’s history.
Redfin fires 13% of its staff in latest tech firm mass layoffs as inflation soars.
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Big Tech, bubble, chaos, collapse, debt bomb, debt collapse, economic collapse, economics, economy, financial crash, Great Recession, jobs, market crash, mass layoffs, money supply, panic, risk, Silicon Valley, tech giants, technocrats
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