Since 2022, the tech biz has been a layoff-filled bloodbath. Yup, this industry has been firing its workforce left, right, and centre.
Seriously, it’s a failure-and-a-half. Over 150,000 people have been kicked to the curb, and whole teams have been chopped on the chopping block.
These tech layoffs include:
- Roku firing 200 people
- PayPal firing 2000 people
- Indeed firing 2200 people
- Meta firing 21,000 people
- Amazon firing 20,000 people
What’s more, this list is just the tip of the iceberg. Joints like Twitter, Zoom, and Apple have also purged their staff members. Even Microsoft is in on this action, dismissing an entire team that was dedicated to making our AI products more ethical.
But why are all these tech layoffs taking place? Is the entire sector going kaput? And will these firings eventually impact other industries? Let’s answer these questions right now.
The Gains of COVID
During the COVID pandemic, a lot of humans were working from home, relaxing at home, and weeping at home. This sudden and brutal transformation led to a tech boom. People were downloading chat programs and buying new laptops. They were also drunkenly messaging their ex-lovers on Meta’s Facebook.
A new way of life had rapidly opened up.
Additionally, the tech industry thought that this new way of life was here to stay. They predicted that their COVID-level profits would be the way of the future. So, a whack of tech companies hired a whack of people. They were ready for an Earth where they were even bigger juggernauts.
However, this future never came to pass. The COVID pandemic got quieter, people returned to the office, fewer Zoom calls took place, and fewer laptops were bought. This resulted in the tech industry having more employees than they could handle.
It’s worth noting that Meta’s Mark Zuckerberg even said as much back in November. He explained that at the start of COVID, a lot of industries “rapidly moved online” and that the “surge of e-commerce” made his company a lot richer.
“Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended,” said Zuckerberg. “I did too, so I made the decision to significantly increase our investments.”
“Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected.”
During this explanation, Zuckerberg announced that he was firing 11,000 humans.
Zuckerberg said, “We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”
Investors Demand Profits
For a long time, some investors were happy with betting their money on the raw potential of a tech company. They were happy to give them cash in exchange for profits in the far-flung future.
The dream was tech monopolies. The dream was unlimited profits.
However, in recent years, these investors have somewhat changed their opinions. They want their profits right now. They’re sick of impossible fantasies and are demanding concrete numbers.
So, what’s an easy way of quickly increasing one’s profits? By cutting one’s workforce. By creating tech layoff bloodbaths.
If only these bloodbaths didn’t wreck lives.
The Amazon Problem
In 2022, Amazon’s utility computing team posted 24,988 job openings. However, only 7,798 of those positions were actually approved.
According to some internal Amazon documents, this team suffered from having a lax hiring process that was “prone to inconsistency, error, and potential misuse.”
Now, to state the clear-cut, being an employer that overhires employees is a super risky thing to do. Especially when these hires aren’t approved by the company.
It’s very possible that some of Amazon’s tech layoffs could have been avoided if this overhiring never happened. Some very real pain could have been avoided if their utility computing team hired responsibility.
As of March 24, Amazon hasn’t publicly discussed this situation.
Are Our Jobs Becoming More Automated?
According to research by Forbes, a chunk of the folks who’ve been fired in the tech industry were from human resource departments. They have said that, as of January 2023, a whopping 28% of the tech layoffs have been HR peeps.
This is because if you’re hiring fewer staff, you don’t need as many HR reps to conduct interviews, chat with references, and whatnot. However, these layoffs could have also happened because these activities are becoming more automated.
“Platforms already exist that aim to automate routine tasks related to interviewing and onboarding new hires,” wrote Bernard Marr for Forbes.
“In recent years, it’s even been reported that companies such as Amazon have used AI to identify low-performing staff and then fire them.”
Now, it’s worth noting that Marr’s automation theory is still a theory. Nothing has been proved, no statements have been made. However, if this tech trend continues over the rest of 2023, it’ll be one worth future discussion. Because, if the tech industry is automating its HR processes, other industries could be next.
The Bloodbath’s Not Over
Salesforce, an American cloud-based software company, slashed 10% of its staff in January. And on March 25, Bloomberg reported that more job cuts might be on the way.
As the CEO of Salesforce, Brian Millham, stated, “The structure of the organisation, if we feel like it needs to change and reshape, we’re going to make those moves to drive the efficiencies.”
If a juggernaut like Salesforce is considering more layoffs, then other tech companies are probably in the same boat. Unfortunately, this situation is far from kaput.
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