From companies like Twitter to Meta, layoff numbers are growing rapidly as tech companies are cutting thousands of jobs.
For over two decades, the U.S. tech industry has been growing and the source of many highly coveted jobs; however, the nuances have begun to fade quickly as a tech “reckoning is underway,” according to NPR.
Data shows that in the past year, there have been a total of 120,000 tech jobs lost, with 32,000 in the past month, with more expected to come.
NPR cited many of the layoff reasoning stems from two primary causes based on several companies’ public statements.
“First, they hired a lot of employees during the pandemic, when people were extremely online. Now, the internet boom has faded, offline life has picked up, and those new employees seem too expensive,” NPR said.
“Second, broader economic wobbles have made brands more reluctant to spend on digital ads–a source of revenue for many tech companies. High-interest rates have put an end to the cheap-money era of venture capital,” NPR said.
This has caused giant tech corporations to lay off in massive waves.
According to NPR, Amazon has reported 10,000 jobs lost as of last Monday. Meta has laid off 11,000 employees. Twitter has reported 3,700 jobs after a takeover from Elon Musk, resulting in a 50% staff cut; according to the New York Times, this resulted in an additional 1,200 employees resigning since.
Other companies experiencing major layoffs include Salesforce, Stripe, Microsoft, Zillow, Snap, and Robinhood.
According to KRON, layoffs may not stop there. Another Bay Area tech giant is expected to join in on the staff trimming: google.
“Google is planning on laying off about 6% of its workforce — roughly 10,000 people — that managers characterize as “underperforming,” KRON said.
The layoffs may not end anytime soon, but a big question on many minds is how it will impact other industries.
LEX18 talked to Connel Fullenkamp, an economics professor at Duke University, about the issue.
“You see a headline number that sounds like a lot of layoffs, but we have to remember the backdrop that we’re still well over a million unfilled jobs out in the general labor market,” Fullenkamp told LEX18. “There’s a lot of activity in the tech sector that we don’t necessarily see on a daily basis that aren’t household names, that are going to be still active and still hiring.”
There may be a ripple effect that occurs with mass job loss, but the rise of remote work from the pandemic may provide relief for many former tech workers. For the tech industry itself, there will also be a relief, which is already showing.
“The tech industry will rebound. In fact, it’s already starting to,” Venture Beat said. “We’re seeing companies invest heavily in new technologies and software, which is creating a lot of new jobs — albeit at a slower pace than a few years ago, which may mean tech companies have learned a thing or two.”
