Why are the world's biggest tech companies laying off employees? And how many more jobs will be affected? Big Silicon Valley tech companies Google, Microsoft, Amazon, and Meta have collectively laid off more than 100,000 employees in recent months. Many believe more layoffs are yet to come. But why are the world's biggest tech companies laying off employees? Tech sector is undergoing a major shift as Microsoft joins Amazon, Meta and Salesforce in announcing major layoffs.
Over-hiring during COVID? During the pandemic, Google made rapid changes to its Google Meet video conferencing platform to accommodate more participants, and Meta made similar changes to WhatsApp's video conferencing product.
Source:
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Meta told employees to prepare for a large-scale downsizing in November, cutting 11,000 employees. And Salesforce cut 10% of its employees in January 2023 after the company's chief executive admitted the firm over-hired. Sundar Pichai pointed this out in the letter he sent to employees after announcing the layoffs of 12,000 people.
Pressure from Investor Fund managers and early investors in big tech companies like Google, Meta, Amazon, Twitter others made management to make quick decisions to counter slowing business growth.
Several new investment initiatives by Silicon Valley tech titans are also not profitable. Amazon's robotics division, Microsoft's metaverse and virtual reality division AltspaceVR, and Meta's Substack competitor called Bulletin are all verticals that are somewhat futuristic and require a lot of investment and burned a lot of money. Cash burning has also been one of the reasons companies are trying to cut costs. According to top management of big tech companies, a recession is anticipated shortly. But while Microsoft will continue to spend on the cloud, acquisitions and innovation, it will pull out of non-strategic areas like hardware.
The upshot – Covid (over-hiring), slowing business growth and forecasted recession - are all good reasons but the people impacted are real. Unfortunately, managements seldom get fired. Employees do!
Reference:
Why tech giants Amazon, Google, Meta, and Microsoft fired 200,000 people, Kahekashan, Hans News Service, 30 Jan 2023
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