News JVTech The economic crisis is hitting tech hard. More than 120,000 unemployed employees at Apple, Facebook or Microsoft (…)
The years follow one another, but are never alike. And that, the Tech giants paid the price for in 2022. After three years of growth, layoffs have flowed freely, whether on the side of Google, Amazon or Meta.
2022 was a tipping point for the big tech industry. After years of growth and expansion, some of the biggest companies in the world have run into the classic problems that beset every small business in the world. Inflation, rise in the price of raw materials, balance sheets that do not balance, projects that fail, but also and above all staff that must be reduced.
Eh yes, all good things must come to an end, even for the tech giants who always seem to overlook the problems. Today, big tech companies face a problem that other industries have faced in the past: normality, or rather, crisis. And nothing better sums up the state of impasse in which the sector finds itself than the wave of layoffs announced by all major companies in the previous fiscal year. The latest to join this trend are Amazon and Microsoft. The e-commerce monster has announced a new wave of layoffs (18,000) during this first quarter of 2023. For its part, Satya Natella’s firm should announce the loss of 11,000 jobs, which would then represent nearly 5% of its workforce.
120,000 is the approximate number of professionals who lost their jobs in 2022 in the United States. And the beginning of 2023 does not seem to point to a lull, since thewe can already add nearly 30,000 layoffs (counting those of Amazon and Microsoft) to this already impressive number. As you are no doubt aware, most of these layoffs were announced in November, when Meta (11,000), Amazon (10,000) and Twitter (3,700, or about 50% of the workforce) made deep and honest in their teams. The cause ? The pandemic. Many of the big tech companies have made massive recruitments during this global health crisis. But almost three years later, the latter must now face a global economic slowdown and therefore pay a heavy backlash.
Companies like Tesla where Apple have also had to review their strategies, while they largely dominate their respective business sectors. Elon Musk’s firm parted ways with 3,500 employees in June 2022, while the apple announced a recruitment freeze in fiscal year 2023. Google, for its part, has qualified 10,000 employees as “poor performers”. This Visual Capitalist chart helps to understand the extent of the phenomenon.
Through the quotes on this infographic, we therefore partly understand the reasons for these multiple bleedings. An inefficient company that was never profitable and only enjoyed enormous financial viability thanks to the support of investors (Twitter) with skyrocketing interest rates and runaway inflation. A company embarking on a major transition to a faltering metaverse (Meta). The big technology companies wanted to do everything in a very short time (autonomous cars, virtual reality headsets, advertisements, software, …) and the crisis ended up catching up with them – at least momentarily.