Two days back, General Motors cut several executive-level and salaried jobs. In April, Amazon cut 9,000 more corporate jobs including in its cloud computing and advertising businesses. Amazon’s cloud business is slowing down on account of the economic slowdown. The tech giant has already laid off 27,000 positions in the past year.
In March, Meta announced 10,000 more jobs will be gone in the coming months. According to Layoffs.fyi, since the beginning of 2022, tech layoffs have impacted 300,000 workers. In February, Twitter let go of at least 200 employees, leaving it with a workforce of less than 2,000.
Read more: Mental health awareness in the workplace: A growing trend
In February, telecoms gear maker Ericsson announced about 1,400 layoffs in Sweden to cut global costs. The company had earlier announced plans to cut costs by $880 million by the end of 2023 as demand slows in some markets, including North America.
In January, music streaming platform Spotify announced plans to cut 6% of its workforce. Same month, IBM announced 3,900 layoffs as part of an asset divestment and missing annual cash target. SAP also said it planned to cut 3,000 jobs, or 2.5% of its global workforce, while reviewing the sale its remaining stake in survey-software seller Qualtrics.
India hasn’t been faring well either. Last October itself, Indian tech giants like Wipro, Infosys and Tech Mahindra rejected freshers after giving them offer letters, cancelling several hirings.
Big Tech Cut Costs Earn More
As big tech gets rid of most of its workforce in a phenomenal global layoff process to cut costs, we cannot ignore the fact that companies like Meta, Google, Amazon made huge profits during the pandemic. In the first three months of 2021, Amazon revenues rose to US$108.5 billion in sales, 44% more than a year earlier. It also reported US$8.1 billion in profit, a 220% spike from the same period last year.
It also makes me wonder if big tech is saving costs to spend more on AI development, which is where the profits and glamour of the times sit
Similarly, between 2020 and 2021, Google’s revenues expanded by 70% from US$180 billion to US$256 billion. Looking at the high demand for their products and services these companies went on to hire extra workforce. Meta’s workforce grew by 28% in a year.
According to Bloomberg data, the global tech industry erased 137,000 jobs since October. Amazon took out 18,000, Alphabet 12,000, and Microsoft 10,000 positions. Only Apple hasn’t joined the club.
Ripple Effect
Right behind the more high profile big tech layoffs, peek the trickled down layoffs like ad agencies laying off because of ad spend going down. It also makes me wonder if big tech is saving costs to spend more on AI development, which is where the profits and glamour of the times sit.
These layoffs can bring down consumer spending and a slowdown in economic growth, further impacting job opportunities in the area
Meanwhile, the distress caused by these massive layoffs is starting to show, which have resulted in a flood of experienced and highly skilled professionals suddenly entering the job market, which can increase competition and make it more difficult for job seekers to secure new roles, not to mention lower salaries.
Lower salaries can cause a ripple effect on the local economy, particularly in areas where these companies have a significant presence. These layoffs can bring down consumer spending and a slowdown in economic growth, further impacting job opportunities in the area.
Impact on Job Seekers
What about these high talent job seekers with low morale, who are now out in the job market?
Mental health wise, these job seekers can face problems caused by the anxiety of an uncertain future. However, it is not all bad news for job seekers. Big tech companies often offer attractive compensation packages and benefits, which can make them desirable employers for job seekers. As big tech laid off employees go out into the job market, they can leverage the big tech name on their resume. But they’ll have to bring down the salary, which is likely to go down overall.
As big tech laid off employees go out into the job market, they can leverage the big tech name on their resume
Meanwhile, normal job seekers are facing the music too. International students on special visas are seeing hard times, as jobs are becoming scarce in higher ed-attractive countries like the US. Many are beginning to widen their job hunt to companies they hadn’t thought of.
As a Kellogg dean advises, “You need to look at adjacencies. For example, there is a lot of tech at nontech companies.”
Read more: Big tech & India work towards language inclusive tech
Some laid off workers are choosing to become their own bosses, leveraging hefty severance payments to fund a passion project. “The golden handcuffs are off, and I can do whatever I want now,” founder Jen Zhu told Wired.
Big tech mass layoffs look like a phenomenon that will resurface from time to time. No one seems to have any control of that. Even though the impact of these layoffs is far reaching, the ecosystem is a big place. We can hope it will take a turn for the good soon.
