What is going on with tech layoffs?
When we first saw that over 100k tech employees have lost their jobs worldwide, we thought it was an exaggeration. The number just seemed unreal.
To put it into perspective, that’s around the whole capacity of the Michigan stadium “The Big House”, the 3rd biggest stadium in the world with around 107,600 seats.
Naturally, we wanted to confirm this information with more than one independent source and databases that accumulate this type of statistic – and they were all coherent.
What’s more, we started seeing testimonials on social networks from strangers, acquaintances, but also from people we knew very well.
But what led to these massive layoffs?
Although each company has individual reasons, one this is common for all of them, judging by their official statements – cutting operations costs and increasing profits.
Other than that, many companies claimed to have over-hired during the Covid-19 pandemic and are now seeing the consequences of that decision.
However, the public perceives these massive layoffs as perplexing since none of these companies are facing bankruptcy. In fact, they’re bragging with record-breaking profits and are still making expenditure of millions and billions of dollars.
That’s why, many are wondering were these layoffs really necessary.
I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1 2023.
Mark Zuckerberg’s Message to Meta Employees
So, let’s see what the numbers look like.
Which companies are laying off?
The fact that the total number of lay-offs in January 2023 is bigger than November and December 2022 combined, is clear evidence that the market is disrupted heavily.
According to the real-time tech layoff tracker TrueUp.io, these were the companies with the most layoffs in 2023 so far:
- Amazon – Laid off 18,000 people on January 18th.
- Alphabet – Laid off 12,000 people on January 20th.
- Microsoft – Laid off 10,000 people on January 18th.
- Salesforce – Laid off 7,000 people on January 4th.
- Dell – Laid off 6,650 people on February 6th.
- Philips – Laid off 6,000 people on January 30th.
- IBM – Laid off 3,900 people on January 25th.
- Pinterest – Laid off 2,150 people on February 2nd.
- Yahoo – Laid off 1,600 people on February 9th.
- Zoom – Laid off 1,300 people on February 7th.
PayPal, Ericsson, Coinbase, Crypto.com, Spotify, Tencent, Wix, and many more have also cut down their workforce at a significant rate.
After a deep set of reviews, we recently decided to consolidate some teams and programs. One of the consequences of these decisions is that some roles will no longer be required.
Dave Limp’s Message to Amazon Employees
This is just to prove that candidates on the job market can no longer stick to the old saying that established companies provide secure jobs since major players have also been affected by the global crisis.
Therefore, giving a chance to cutting-edge startups that are yet to prove their worth may not seem like a risky move at this point.
Employment fraud targeted at laid-off tech employees
Following this negative trend, many laid-off tech employees have started to put themselves out there. For example, many lay-off tracking platforms, you can find info about the exact employee, such as their full name, social profile, and contact address, as well as their expertise, interests and previous experience.
All of this personal information was self-submitted by the employees themselves, in order to enhance their chances of getting the attention of the next employer.
However, this transparent information sharing has, of course, led to its misuse.
Especially on LinkedIn, users have posted their negative experiences of fake hires and the onboarding process. This type of online scam was specifically targeted at candidates with a background in cryptocurrency.
Source: Freepik
Many reported getting a solid offer from a seemingly trusted employer, followed by an interview with a real person providing them more details on the job, the onboarding process that didn’t seem to differ from the usual…
Then, things would start to get sketchy. Someone from the company would request the new employee to stake some of their crypto assets for whatever purpose.
Naturally, the person would start to get suspicious.
As a way to fight the suspicion, the fake company gives the candidate an opportunity to choose the necessary working equipment, receiving a receipt afterward as a proof of a purchase.
And then they would ask for a stake again.
Some would fall for it; the others would run away without looking back.
Luckily, most of them shared their experiences online, warning others about this employment fraud scheme.
At first, it may seem like this scam wouldn’t happen to you and that you could see through it, but keep in mind that laid-off employees were at a very vulnerable stage, looking for a secure way out and trying to stay optimistic while looking for a new employer.
It isn’t difficult to trick people with that mindset, especially if the fake company got a hold of the candidate’s personal information and therefore made the offer more personalized.
Are more tech layoffs coming in 2023?
Many predict that this trend is going to continue throughout Q1 2023 but that afterward it will continue to be at its regular pace before the massive layoffs happened.
Notice how we used the word “trend” – that’s because many experts believe that tech companies are in fact copying each other, and that the layoff wave started with Elon Musk announcing drastic changes in November 2022.
Having in mind that the mentioned numbers of layoffs are at a peak, it isn’t expected that this many employees will be cut off again in the near future.
Although there were around 150,000 layoffs in the previous three months, the need for IT staff remains high. Perhaps we are just witnessing the redistribution of personnel from the largest companies to smaller ones. Polls show that 80% of them who were fired found a new job within 3 months, and as many as 40% got a new job in the first month.
CEO Infinum Montenegro Mladen Rakonjac in an interview for the portal Investitor
Finally, we have to mention two more important factors that could impact the future decisions of employers:
- Some of the layoffs happened due to risky business decisions, such as Mark Zuckerberg’s huge investments in Metaverse that didn’t meet the expected ROI;
- Companies are turning their heads to the current buzzwords in the industry, such as artificial intelligence, so it is expected they will invest in this area more.
In other words, if companies don’t think through their business decisions well, we can only hope that the employees won’t be collateral damage again.
Last but not least, those who are currently in the job market will be faced with fewer opportunities since companies are now more cautious with their hiring.
Still, to end up on a brighter note, when a crisis of similar proportions happened in 2008, one good thing did come out of it – many talented people decided to start their own business and are today some of the most influential in the industry.
