Nov 18 – In Big Tech, job cuts and revenue loss announcements give the impression that the sky is falling. However, the doom and gloom fail to give a sense of the full picture. What is really happening here?
After purchasing Twitter at the price of $44 billion, Elon Musk began layoffs that cut its 7,500 person workforce in half. Since then, remaining employees have been informed that they can continue with the company, in an “extremely hardcore working culture,” working nights, weekends, and odd-hours, or they can leave with three months’ severance pay.
Across the tech industry, other companies have also announced broad layoffs this month. According to the Layoffs.fyi website, which tracks tech job cuts, more than 120,000 jobs have been lost worldwide.
It’s not only coders with six figure salaries and company-procured lunches who have seen the impact. Over the weekend, news broke noting that Twitter had cut 4,400 of its 5,500 person contract workforce; people who are largely employed by third-parties in the Philippines.
Others affected by recent job cuts include thousands of employees who work with a specific outsourcing company that retains offices in Kenya and Nepal. “Right now in Kenya it’s hard to get jobs…I can see a lot of people plunging into depression, because the situation is really bad in Kenya right now,” a worker told Time Magazine.
Amazon expressed that its 10,000 recent job cuts have occurred due to an “unusual and uncertain macroeconomic environment,” that forced the company to shift its priorities.
In the early stages of the pandemic, tech companies were operating at a blistering pace and ramped up hiring. Now, executives say that they miscalculated, and cite pandemic overspending as a reason for job losses.
In addition to the aforementioned, tech firms are facing increasing opposition to intrusive advertising, and at the same time, many firms have reduced their advertising budgets, leading to reduced revenue all-around. Heightened interest rates may also be hurting companies.
Investors have also exerted pressure on high-powered firms, stating that leaders haven’t responded to warning signs of a slowing economy.
And with investor emphasis on earnings, there is less tolerance for blue skies projects, like driverless cars, helicopter taxis, or other high-tech gambles.
Twitter: As more than 50% of Twitter’s workforce departs the company, will talented staff band together to start new businesses? At least a few industry insiders think so.
Although Big Tech companies have taken action to slow, freeze or reverse hiring, the outlook for the tech sector as a whole looks much more optimistic. In the tech industry and elsewhere, demand for workers with technology skills remains high. Last month, there were over 317,000 open tech jobs in the U.S., a number that tops the number of open tech jobs listed in the prior month.
The majority of employers report that it is still a challenge to hire for certain roles, particularly those within data science, cloud engineering and cyber security.