Integrity Score 1940
No Records Found
No Records Found
Tech companies are always in the news, usually touting the next big thing. However, the tech news cycle recently hasn’t been dominated by the latest gadget or innovation. Instead, layoffs are in the headlines.
In the last year, more than 70,000 people globally have been laid off by Big Tech companies – and that doesn’t count the downstream effect of contractors (and other organisations) losing business as budgets tighten.
What exactly led to this massive shakeout? And what does it mean for the industry, and you?
What’s the damage?
Since the end of the pandemic hiring spree, large numbers of employees have been fired from major tech companies, including Alphabet (12,000 employees), Amazon (18,000), Meta (11,000), Twitter (4,000), Microsoft (10,000) and Salesforce (8,000).
Other household names share the spotlight, including Tesla, Netflix, Robin Hood, Snap, Coinbase and Spotify - but their layoffs are significantly less than those mentioned above.
Importantly, these figures don’t include the downstream layoffs, such as advertising agencies laying off staff as ad spend reduces, or manufacturers downsizing as tech product orders shrink – or even potential layoffs yet to come.
And let’s not forget the folks leaving voluntarily because they don’t want to come into the office, hate their managers, or aren’t keen on Elon Musk’s “hardcore work” philosophy.
The knock-on effects of all of the above will be felt in the consulting, marketing, advertising and manufacturing spaces as companies reduce spending, and redirect it towards innovating in AI.
So what’s driving the layoffs?
The canary in the coal mine was reduced advertising spend and revenue. Many tech companies are funded through advertising. So, for as long as that income stream was healthy (which was especially the case in the years leading up to COVID), so was expenditure on staffing. As advertising revenue decreased last year – in part due to fears over a global recession triggered by the pandemic – it was inevitable layoffs would follow.
Apple is one exception. It strongly resisted increasing its head count in recent years and as a result doesn’t have to shrink staff numbers (although it hasn’t been immune to staff losses due to work-from-home policy changes).