Tech Layoffs: Wall Street Cheers, But Tech Workers Face Uncertainty
By The technology industry has been rocked by layoffs in the past few years. In 2020 and 2021, tech companies overinvested in hiring more people than required, and as the market started correcting in 2022, many firms realized they needed to cut costs.[0] This led to layoffs across the sector, including at big tech firms like Amazon, Microsoft, Google, IBM, and Spotify.
So far in 2023, more than 68,000 tech workers have been laid off from 219 companies, according to Layoffs.fyi.[1] In the second quarter of 2020, just more than 60,000 people were laid off from 428 companies.[2] In 2022, 154,336 workers were laid off from over 1,000 companies, and more than 2,00,000 people have lost well-paying jobs in the tech sector overnight.[3]
The layoffs are being cheered by Wall Street, and it’s become a playbook for tech companies to follow when earnings start to flounder. This has caused alarm in the tech world, as it signals a shift away from the digital boom that occurred in 2020 and 2021.[0] But the unemployment rate for professionals in the tech sector is still low—less than 2%, according to CompTIA’s, a tech workforce nonprofit association.
The layoffs are also impacting diversity and inclusion departments, as many companies have cut their DEI teams down to just a few people.[4] This is threatening company pledges to boost underrepresented groups in their ranks and leadership.[5]
In 2023, deeper layoffs are expected to come, as most business economists have predicted that their companies will cut payrolls in the coming months.[6] Big Tech companies are now laying off an average of 3,000 tech employees per day globally, including in India.[6] An email from a company executive has warned that new PERM applications have been paused, though other visa applications or programmes are still in effect.
While the tech layoffs are causing concern in the industry, experts caution that this is part of a larger, ongoing trend, and that the unemployment rate for professionals in the tech sector remains low. It’s important to remember this when news of tech layoffs become more frequent.
0. “Why the tech layoff trend might be the start of something new” msnNOW, 29 Jan. 2023, https://www.msn.com/en-in/news/other/why-the-tech-layoff-trend-might-be-the-start-of-something-new/ar-AA16R7n0?ocid=XMMO
1. “Tech Company Layoffs In 2023: The Latest Cuts In Q1” CRN, 25 Jan. 2023, https://www.crn.com/news/cloud/tech-company-layoffs-in-2023
2. “As Big Tech makes mass layoffs, recent Canadian startup reductions might cut deeper” BetaKit – Canadian Startup News, 27 Jan. 2023, https://betakit.com/as-big-tech-makes-mass-layoffs-recent-canadian-startup-reductions-might-cut-deeper
3. “Ex-Twitter employee asks: Were mass layoffs the only way out for a crashing tech sector?” The Indian Express, 26 Jan. 2023, https://indianexpress.com/article/opinion/columns/twitter-tech-mass-layoffs-amazon-google-meta-microsoft-8405927/
4. “Big Tech layoffs are hitting diversity and inclusion jobs hard” The Spokesman Review, 24 Jan. 2023, https://www.spokesman.com/stories/2023/jan/24/big-tech-layoffs-are-hitting-diversity-and-inclusi
5. “Big Tech Layoffs Are Hitting Diversity and Inclusion Jobs Hard” Bloomberg, 25 Jan. 2023, https://www.bloomberg.com/news/articles/2023-01-24/tech-layoffs-are-hitting-diversity-and-inclusion-jobs-hard
6. “219 tech firms sack over 68K employees in Jan, deeper layoffs coming” Greatandhra, 29 Jan. 2023, https://www.greatandhra.com/articles/special-articles/219-tech-firms-sack-over-68k-employees-in-jan-deeper-layoffs-coming-126914
