Why are companies in the tech industry throwing massive layoffs?

Big tech companies have been on the layoff agenda lately. Share of employees on LinkedIn showed that many people have been laid off in recent days. Finally, laying off approximately 11,000 people at Amazon was on the agenda. Following the news, Dave Limp, an Amazon executive, said: “This makes me sad… We will lose talented Amazonians in the devices and services department.” made a statement.

Beyond Amazon, employees at big companies like Meta, Coinbase, Twitter, and Snap also say they are looking for new job opportunities. More than 120,000 jobs have been filled worldwide, according to Layoffs.fyi, a site that tracks layoffs in the tech sector. Reasons for leaving companies vary, but there are common reasons. So why are tech companies throwing mass layoffs?

Internet usage has increased worldwide during the coronavirus pandemic. This forced the tech giants to open up a large number of new positions.

For example, Meta (Whatsapp, Facebook, Instagram) hired over 15,000 people in the first 9 months of 2022. But in recent months, company leaders have begun to think that this is wrong.

Online advertising is the main source of income for many technology companies around the world. But lately, these companies have struggled with advertising revenue.

Because companies face huge backlash against advertising practices that harass users without permission. On the other hand, these days, when the economy has entered a period of global recession, companies have significantly reduced their advertising budgets. The increase in interest rates affected, in particular, technology companies.

Amazon, “an extraordinary and uncertain macroeconomic environment” cited as reason for dismissal

On the other hand, Apple CEO Tim Cook expressed caution, saying the company is only hiring for some positions. In addition to companies, investors also blame companies for excessive inflation and say that costs should be reduced.

We see a similar picture on Twitter, which has problems with making a profit. Elon Musk fired almost half of the company’s employees. He makes the other half work long hours.

Mike Morini of WorkForce Software says the era of growth at any cost in the tech industry is over.

It looks like the big tech companies, while faltering economically, haven’t been wiped out yet. Although many have been affected by these layoffs, all employees are talented and skilled in their field. This can lead to all kinds of undertakings, such as the creation of new companies.

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