Firing IT Professional
More than 70,000 people have been laid off by Big Tech
companies in the last year, and that doesn't include the downstream effect of
contractors (and other organizations) losing business as budgets tighten.
Durham (United States): Tech firms are constantly in the
news, usually touting the next big thing. However, the latest gadget or
innovation has not recently dominated the tech news cycle. Instead, layoffs are
dominating the news.
More than 70,000 people have been laid off by Big Tech
companies in the last year, and that doesn't include the downstream effect of
contractors (and other organizations) losing business as budgets tighten.
What exactly caused this massive upheaval? What does this mean for the industry and for you?
What is the harm?
Large numbers of employees have been fired from major tech
companies since the end of the pandemic hiring spree, including Alphabet
(12,000 employees), Amazon (18,000), Meta (11,000), Twitter (4,000), Microsoft
(10,000), and Salesforce (8,000).
Tesla, Netflix, Robin Hood, Snap, Coinbase, and Spotify are
also in the spotlight, but their layoffs are significantly lower than those
mentioned above.
Importantly, these figures do not include downstream
layoffs, such as ad agencies laying off staff as ad spending falls, or
manufacturers downsizing as tech product orders fall - or even future layoffs.
Not to mention those who leave voluntarily because they
don't want to come to work, despite their managers, or disagree with Elon
Musk's "hardcore work" philosophy.
All of the above will have an impact on the consulting,
marketing, advertising, and manufacturing industries as companies reduce
spending and redirect it toward AI innovation.
So, what is causing the layoffs?
Less money spent and earned on advertising was the canary in
the mine. Advertising is a major source of funding for tech businesses.
Therefore, spending on staffing was healthy as long as that income stream was
as well (which was particularly true in the years prior to COVID). Layoffs were
a foregone conclusion when advertising revenue dropped last year, in part
because of worries about a pandemic-induced worldwide slump.
The one exception is Apple. It has resisted hiring more
people in recent years, so it doesn't need to reduce its workforce (although it
hasn't been immune to worker losses brought on by changes in work-from-home
policies).
The implications for consumers
Even while the headlines can be shocking, customers won't
really be affected that much by the layoffs. In general, progress on
tech-related goods and services is still being made.
Even Twitter, which many anticipated would be extinct by
this point, is attempting to diversify its revenue sources.
However, certain side projects, like Mark Zuckerberg's
Metaverse, probably won't progress as far as their creators had intended. The
layoffs that are focused (at least at Amazon, Microsoft, and Meta) in these
major innovation bets made by senior leaders are proof of this.
Low financing rates and increasing COVID-related demand
during the past few years have given business executives the assurance to
invest in cutting-edge products. Except for AI, that investment is currently
declining or nonexistent.
What about those who lost their employment, though?
The effects of layoffs can be devastating for the people involved. But in this instance, who is impacted?
The majority of those who lose their employment are professionals with advanced degrees who are in high demand. They frequently receive severance payouts and support that go above and beyond what is legally required. For instance, Amazon stated clearly that any losses would pertain to IT staff and others who support them rather than warehouses.
Even while it doesn't appear to be as as heated as many had
expected, having a Big Tech employer on their CV will be a real advantage when
these people move into a more competitive work market.
What does this indicate for the IT sector?
Due to the resurgence of the job market for experienced
computer experts, earnings are anticipated to decline, and higher levels of
education and experience will be necessary to get employment. These
fluctuations in the market could be an indication that it is catching up to
other, more established segments.
Although the recent layoffs are noteworthy, the economy as a
whole won't be significantly impacted. Even if Big Tech fired 100,000 employees,
that would just represent a small portion of the industry's workforce.
The published figures could appear substantial, but they're
frequently not expressed as a percentage of total salary expenditure or
staffing levels. They represent a tiny portion of the enormous number of new
recruits that certain tech companies first made as a result of the pandemic.
Big Tech continues to be a significant employer and will
have a lasting influence on a wide range of facets of our lives.
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