The tech sector has been in a contraction phase in recent times with over 330,000 jobs lost ,according to layoffs tracker Layoffs.fyi. Major tech firms such as Amazon, Google, Meta, Microsoft and Twitter have collectively cut around 70,000 jobs, and analysts suggest they may still have room to slim down. This has been sparked by worries about profitability and a lack of foresight in relation to the end of trend-busting growth and cheap money.
Analysts at Jefferies have noted that while Google has so far announced one round of job cuts (affecting 12,000 workers) this only amounts to a 6% reduction in headcount as opposed to cuts of more than 10% at other companies. Add to that Google hiring over 71,000 employees in the last three years and it is clear that there is potential for further job losses. This theory is further backed up by the example of Meta, which has seen minimal impact on its growth after laying off around 25% of its staff.
Echoing this sentiment is a recent report from Oppenheimer which suggested Amazon should make additional job cuts in order to improve its profitability. Despite hiring 20,000 staff in the last six months, Amazon’s profits per employee (excluding warehouse workers) are still ‘significantly below peers’ and as a result, more redundancies are necessary.
Smaller companies and startups have not been off the hook either. Over 1,700% more layoffs occurred at US startups in the first three months of 2023 compared with the same period the year prior. This is likely due to the current tough funding environment, which has seen Venture Capital backers become increasingly cautious of where they plough their money.
Finally, even tech stalwart Apple is not immune to potential job cuts. In an effort to become more efficient, Apple has told its retail staff they must reapply for jobs or face losing them.
It’s evident that the tech sector continues to face an uncertain future. Thus tech employees should expect more job losses in the coming months, no matter the size of the company.
Google is an American multinational technology company that specializes in Internet-related services and products, which include online advertising technologies, search, cloud computing, software and hardware. The company was founded in 1998 and has become one of the world’s most successful and recognizable organizations. Google is widely known for its search engine and for its other products, such as Android, Gmail, Google Maps and YouTube.
Ruth Porat is the Chief Financial Officer of Google and Alphabet Inc. She is credited for driving Google’s growth and helping the company to become one of the most profitable entities in the world. Prior to joining Google, she held senior positions at Morgan Stanley, where she served as Chief Financial Officer and spent 25 years. Porat was named one of Fortune’s “Most Powerful Women in Business” in 2021 and was also listed as one of Time’s “100 Most Influential People” that same year.
