BIG TECH is firing employees in thousands

Why? And how worried should techies be?

NT Bureau, Press Trust of India

Bengaluru: Tech companies are always in the news, usually touting the next big thing. However, the tech news cycle recently hasn’t been dominated by the latest gadget or innovation. Instead, layoffs are in the headlines.

In the last year, more than 70,000 people globally have been laid off by Big Tech companies – and that doesn’t count the downstream effect of contractors losing business as budgets tighten.

What’s the damage?

Since the end of the pandemic hiring spree, large numbers of employees have been fired from major tech companies, including Alphabet (12,000 employees), Amazon (18,000), Meta (11,000), Twitter (4,000), Microsoft (10,000) and Salesforce (8,000).

Other household names share the spotlight, including Tesla, Netflix, Robin Hood, Snap, Coinbase and Spotify - but their layoffs are significantly less than those mentioned above. The knock-on effects of all of the above will be felt in the consulting, marketing, advertising and manufacturing spaces as companies reduce spending, and redirect it towards innovating in AI.

So what’s driving the layoffs?

The canary in the coal mine was reduced advertising spend and revenue. Many tech companies are funded through advertising. So, for as long as that income stream was healthy, so was expenditure on staffing. As advertising revenue decreased last year – in part due to fears over a global recession triggered by the pandemic – it was inevitable layoffs would follow.

What does it mean for consumers?

Although the headlines can be startling, the layoffs won’t actually mean a whole lot for consumers. Overall, work on tech products and services is still expanding.Even Twitter, which many predicted to be dead by now, is looking to diversify its streams of revenue.