Why are there so many layoffs in Big Tech companies?
Created the:28 February 2023
The headlines about massive layoffs in Big Tech began in the second half of 2022, and it seems that every week there is news of some cutbacks. What happened in an industry that appeared to have no limits?
The response offered by most of these companies is that they had over-hired during the pandemic and with the return to normalcy, they realized that many positions were surplus. In a sector where there has always been a need for more labor, and even competition for the best talent, it is surprising.
But the economic uncertainty that has shaken the West due to widespread inflation and the international political instability resulting from the war in Ukraine has affected the Big (and not so big) technology companies, and they have decided to be more cautious.
Technology companies that have made massive layoffs
- Technology companies that have made massive layoffs
- Amazon is the company that will lay off the most people: 18,000 workers.
- Google is reducing its staff by 6%, with 12,000 layoffs expected in the coming months.
- Meta was one of the first companies to announce massive layoffs, eliminating 11,000 jobs in November, or 13% of its workforce.
- Microsoft also announced a cut of 10,000 people, which is equivalent to 6% of the total.
- IBM will lay off 1.5%, or 3,900 positions.
- Twitter kept just over half of its staff after laying off 3,700 people.
- Spotify Technology plans to cut 6%, or approximately 600 jobs.
- Salesforce will lay off 2,500 workers.
Since mid-2022, the digital sector has seen more than 150,000 layoffs.The crisis is also affecting regional brands such as Ualá, TiendaNube, Kavak, and Etermax.
The only company that has not made any layoffs is Apple, which, in addition to having a more prudent commercial and financial strategy than the rest, was the only one whose CEO took a pay cut. Tim Cook decided to earn 40% less this year, just $35 million.
Where is tech talent heading?
Working for one of the big companies was the dream of many professionals because of the money, benefits, and prestige, but now it is much more attractive to aim for a startup. The appeal lies in collaborating on a project from scratch, helping it grow, and demonstrating talent.
However, Business Insider explains that, on the one hand, small companies cannot offer the same salaries as more established ones, so they would not be able to absorb all that available human capital.
On the other hand, there are cultural differences between those who work in Big Tech and startups, so hiring is cautious. What they are looking for are people who have experienced diverse challenges, have many skills, and can work on various projects.