While on the job market last year was noticeably strongerthe technology industry was an exception.
After a massive hiring frenzy in the first two years of the pandemic, industry giants like it amazon and Purpose In 2022, it changed course. At least 154,000 jobs were laid off at more than 1,000 tech companies last year. abbreviations.fyiA website tracking tech layoffs since March 2020.
The website estimates — likely low — that 2023 has continued at a rapid clip, with more than 26,000 layoffs recorded so far this year.
“The actual number of layoffs will be higher than what is on the site because most layoffs are not reported,” Roger Lee, founder of layoffs.fyi, told USA TODAY. “Unfortunately, I don’t see the cuts going away any time soon.”
Which tech companies are downsizing?
Data from Layoffs.fyi shows that the US tech companies that cut the most jobs last year were:
- Target: 11,000.
- Amazon: 10,000.
- Cisco: 4100.
- Caravan: 4000.
- Twitter: 3700.
Are tech companies freezing hiring?
Jobs for technical jobs decreased by about 30% Recruitment in the industry fell 23% between January and December last year, according to December data from talent recruitment firm iCIMS.
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Why are there so many layoffs now?
The lockdowns have had a major impact on consumer spending. Experiences like travel or restaurants were largely off the table, so people began shifting their discretionary spending to products from tech companies like Amazon and Peloton.
According to Rucha Vankudre, chief economist at labor markets analytics firm Lightcast, it wasn’t long before consumers began to return to their pre-pandemic spending patterns.
“What we’re seeing is really kind of a re-normalization,” Vankudre said. “And that means, in many cases, these firms are over-hiring.”
High interest rates also play a role in layoffs, according to Daniel Keum, associate professor of business at Columbia Business School.
“It’s not that the big tech companies are cash-strapped, but they’re investing heavily in risky new businesses. And it’s gotten too expensive to finance those things. So they’re pulling back,” Keum said.
Will tech layoffs continue in 2023?
Lee started Layoffs.fyi in March 2020 to help laid-off tech workers gain visibility and land new jobs.
“Honestly, in 2021, I thought about taking the site down because I thought it served its purpose,” Lee said. “I don’t expect that if we fast forward from 2022 to 2023, we’re going to see another wave of layoffs.”
As of Wednesday, Layoffs.fyi has already tracked more than 100 companies with more than 26,000 layoffs in 2023.
Major layoff announcements so far this year include:
- Amazon: 8,000.
- Salesforce: 8,000.
- Coinbase: 950.
On Wednesday, Microsoft also confirmed that it would happen reduces the workforce 10,000 people this year.
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Lee hopes that if interest rate hikes slow, industry job cuts will begin to be subsidized by the end of the year.
Keum said the tech cuts will spread to small and medium-sized tech companies this year as venture capitalists tighten their spending.
“You’re going to see a kind of gradual ripple from big tech to the broader tech industry. The layoffs are going to be a little more widespread,” he said.
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Will layoffs spread to other industries in 2023?
While some industries, such as technology and media, saw an influx of layoffs, the broader labor market remained firm.
The US economy added 4.5 million jobs last year and unemployment rate in December It fell from 3.7% to 3.5%, reaching a 50-year low.
“It’s not a problem we see in the economy,” Vankudre said. “Right now, it really seems like a pretty good fit (for the tech industry).”
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