Tech industry layoffs are currently reaching new heights, which could point towards uncertainties in the overall industry. Just days after Elon Musk fired nearly half of Twitter’s employees, comes another shocking news. Mark Zuckerberg, too, has jumped on the mass layoff bandwagon.
Meta, Facebook’s parent company, has announced one of its biggest job cuts to date. This decision comes as an effort to cut costs after last month’s disappointing quarterly earnings report. There’s no doubt that these events will go down in history as one of the most significant in the tech world.
One might think that such meetings take hours, right? Zuckerberg proves us wrong by announcing this decision in a 10-minute Zoom call on Wednesday. He stated that he takes “full responsibility” for this move, even going as far as to say that it was “one of the hardest calls [he] had to make in nearly 10 years of running the company.” Meta also plans to institute a hiring freeze in Q1 next year.
With this decision comes almost 11,000 employees left with no jobs. That’s 13% of Meta’s workforce. When looking at statistics, it’s safe to say that there have been more tech layoffs in November than in any other month in 2022. According to the founder of Layoffs.fyi, Roger Lee, this number is more than 21000 across 46 different tech companies.
Earlier this year, in June, Musk even reduced 10% of Tesla’s salaried employees. Online payments giant Stripe fired around 14% of its workforce, while Lyft and RedFin each laid off 13% of their staff. Some other companies that have followed similar layoff patterns are Salesforce, Netflix, Microsoft, Twilio, DocuSign, HelloFresh, Opendoor, Peloton and Noom.
These mass layoffs also don’t come as a surprise, if one’s being honest. Tech industries are analyzing the current macroeconomic conditions, and things aren’t looking that great. So, of course, they need to reduce operating costs to tighten their belts. Plus, other issues like supply chain problems, the Ukraine-Russia war, and the ever-increasing U.S. dollar further add fuel to the fire.
According to economic experts, tech industries are a pretty good standard to figure out what will happen next in the technological world. In other words, whatever happens in tech industries might even have a spill-off effect on other industries, too. So, these mammoth-sized layoffs might just be bad news for other companies.
After all, they point to inflation and high-interest rates, which make companies end up in a financially tough position. As a result, they’re forced to take drastic measures such as employee layoffs. For example, Amazon and FedEx are implementing a hiring freeze. If the Federal Reserve continues to have a negative impact on the economy, more companies slashing their workforce seems inevitable.
Featured Image: The New York Times