The pandemic-driven boom that boosted tech companies and their valuations has now turned into a bust in the face of decades-high inflation and rapidly rising interest rates.
One of the big news these days has been Takeover of Twitter by Elon Musk and mass layoffs on the social platform.
However, Twitter isn’t the only tech company making drastic changes to its staff right now.
In fact, there’s an ongoing trend at tech companies that sees mass layoffs and hiring freezes.
Why are so many tech companies downsizing?
When it comes to careers, technology has long been touted as a safe bet when it comes to job security.
Fast and fluid days when it comes to choices, it can no doubt be a stressful work environment – but the pay is generally good and ultimately the world will always need people who can work in tech.
Household names recently include Amazon, Apple, Google, Meta, Microsoft and Twitter.
The reason? Unfortunately, it’s the same reason we’re seeing this trend across the board in business right now.
High interest rates and the cost of living crisis mean consumers are spending less money. This, in turn, has an impact on the revenue of these companies. Less revenue, of course, means businesses need to cut costs.
The current climate seems to indicate that investors are preparing for the coming economic downturn – and the potential recession that follows.
Are you planning for the worst?
This seems to be the general consensus. While a full-scale recession is still just speculation, when big names like Amazon, Apple and Microsoft – some of the wealthiest companies in the world – announce layoffs and hiring freezes, one can have the feeling that the inevitable is happening.
Major tech companies announce layoffs and hiring freezes
For the first time in its history, social media giant Meta announced this week it would lay off 11,000 workers, or around 13% of its staff. It’s one of the biggest tech layoffs this year as the company grapples with a weak ad market and rising costs.
The company will make cuts across all of its businesses (such as WhatsApp, Facebook and Instagram), CEO Mark Zuckerberg said. Meta is also extending its hiring freeze through the first quarter of 2023, with a few exceptions.
Elon Musk began laying off staff on Friday (November 4) as part of his self-described new role as “Chief Twit” – or rather “Twitter Complaint Hotline Operator” according to his Twitter bio.
The company laid off half of its workforce, but said cuts were less significant in the team responsible for preventing the spread of misinformation. Several privacy and compliance officers have also resigned, along with the company’s head of trust and security.
The e-commerce giant has halted the hiring of “further raises” across its workforce.
After a months-long review, Amazon told employees in some unprofitable units to look for jobs elsewhere in the company, The Wall Street Journal reported Thursday (November 10).
It is also considering redeploying staff from some teams to more profitable areas and closing teams in areas such as robotics and retail.
Apple has “suspended almost all hiring”, a decision that could last until the end of 2023.
The last time BT made job cuts in 2018, the company cut 13,000 jobs over three years as part of a cost-cutting strategy. Now he is likely to make even more layoffs.
Lyft announced in early November that it would cut 700 jobs.
Last month, Microsoft cut about 1,000 jobs.