With major huge internet firms like Meta, Twitter, Snap, and Microsoft announcing significant layoffs that have left thousands of employees jobless, the United States’ Silicon Valley, which has been a steady source of high-paying employment and growing equities, is now going through difficult times.
The New York Times broke the news that Amazon intends to let go of up to 10,000 employees worldwide in ‘business and technology’ divisions on Monday, joining what has been dubbed the ‘layoff season’. Prior to that, Facebook’s parent company Meta, which also runs Instagram and WhatsApp, announced employee layoffs that would affect at least 13% of the business.
Why is this happening?
Instead of now, when the boom is beginning to fade, more businesses are cutting staff than ever before because they hired too many people during the global pandemic. Fewer brands will be able to target their audiences as a result of brands’ reluctance to invest in advertising due to rising inflation in the US.
217,404 employees across more than 1,300 tech companies have been fired since the Covid-19 pandemic. The companies that were once thriving are now facing a major downturn. One of the main reasons that are seen across most of them is the reduction in demand. This was in addition to the soaring inflation that has led digital advertisers to cut back on spending on ads.
Layoffs.fyi estimates that more than 24,000 tech workers across 72 companies have been laid off in November. This also comes amid reports of a possible global recession. The Federal Reserve in a bid to control the four-decade-high inflation has been increasing interest rates. It announced its fourth straight increase of 0.75 percent earlier this month.
What has happened so far?
This year, roughly 800 IT businesses sacked more than 121,000 people. In the month of November, there were the most layoffs. After announcing that it will fire at least 11,000 employees, Meta presently tops the list. According to reports, Amazon will concentrate on the business’s devices sector and might cut 10,000 jobs as soon as this week. If verified, Amazon’s planned layoffs would be the largest in the company’s history. Amazon has historically been the most reliable employer in the technology industry.
Twitter’s co-founder and former CEO Jack Dorsey had taken to the platform and accepted the responsibility and apologized for growing the company too quickly. Earlier this year, Snap Inc. the company behind Snapchat said that by the end of August it will cut its workforce down by at least 20 percent which affected nearly 1,200 people.