The layoffs of Amazon, which is expected to affect 10 thousand people, came to light with the posts of employees who lost their jobs on LinkedIn.
Then, Dave Limp, Amazon’s head of devices, said, “This makes me sad…We’re going to lose talented Amazonians in the devices and services unit.”
In the tech industry, many people who work at companies like Twitter, Meta, Coinbase, and Snap say they’re looking for new job opportunities.
According to the website Layoffs.fyi, which tracks layoffs in the industry, more than 120,000 positions have been closed worldwide.
The reasons why employees are laid off vary from firm to firm, but there are common themes as well.
The surge in internet use during the pandemic has resulted in tech giants opening up a large number of new positions, and there was a belief in the industry that hiring would continue.
Meta, which owns Facebook, Whatsapp and Instagram, for example, hired more than 15,000 people in the first nine months of this year.
But now company executives are saying that this is a miscalculation.
Meta CEO Mark Zuckerberg, explaining the decision to lay off 13 percent of the company’s workforce, said that the decision to increase investments was his own, but the result was not what he expected.
CHANGE IN THE MARKET
Online ads are the main source of income for many tech companies, but most companies have a hard time with advertising.
Firms face growing opposition to advertising practices that stalk users without permission. For example, Apple made it difficult for apps on their devices to track their users’ online behavior and sell that data to advertisers.
With the economy slowing, many companies cut their online advertising budgets.
Increasing interest rates especially hit companies in the financial technologies vertical.
Paolo Pescatore, technology analyst at PP Foresight, said: “Quarterly earnings have been really disappointing at many big tech companies. No one is exempt from that.” says.
Even Apple’s CEO, Tim Cook, has signaled caution, saying the company is continuing to recruit but only covers certain positions.
Amazon cited the “unusual and uncertain macroeconomic environment” as the reason for its layoffs, which forced it to focus on customer priorities.
“As part of our annual operational planning process, we review each of our business units and what we need to change about them,” said Kelly Nantel, spokesperson for the company.
“Given the current macroeconomic environment (and several years of rapid onboarding) adjustments are being made to some teams, which means certain roles on some teams are no longer necessary. We do not take these decisions lightly and work to support all employees who may be affected.”
THE BALLOON IS DEFLECTING
Investors also increased the pressure to cut costs, accusing firms of being overblown and slow to respond to slowdown signals.
Activist investor Christopher Hohn wrote in an open letter to Google and YouTube parent company Alphabet, urging the firm to cut employment and salaries.
In the letter, Hohn said Alphabet needs to be more disciplined about costs and reduce losses from projects like self-driving car company Waymo.
Elon Musk, who bought Twitter, which had a hard time making profits and gaining new users, also thinks that the company’s costs can be reduced.
In addition, many people claim that Musk paid more than he was worth for Twitter, and the price increased the pressure.
Musk laid off half of the firm’s employees, and an “extreme” work ethic is promised for those left behind.
Musk told Twitter staff that they should stick to a culture where they work “high-intensity long hours” or leave, US media reported on Tuesday.
Industry watchdog Scott Kessler says there is less tolerance for big spending on high-tech areas like virtual reality or self-driving cars, which may not pay off in the short term.
Investors also find the high wages and generous bonuses paid to some in the industry unsustainable.
“Some companies have had to face the harsh realities,” Kessler says.
Mike Morini of WorkForce Software, which provides digital management tools, states that this could be a turning point:
“The era of growth at all costs in the tech industry is coming to an end.”
While big tech firms have been shaken by economic turbulence, they are not devastated yet.
The 10,000 layoffs that Amazon plans for corporate and technical positions concern only 3 percent of office staff.
Layoffs can lead to different start-ups, such as talented employees leaving large companies to join or start new companies.
As senior Silicon Valley watcher Mike Malone told the BBC: “I’m not going to scratch the valley yet. There’s still a lot of hope.”