Image Source: Bloomberg
LinkedIn posts from people who had lost their jobs were the first sign that Amazon was cutting jobs.
People who work at tech companies like Twitter, Meta, Coinbase, and Snap have said they are looking for new jobs.
The site Layoffs.fyi, which keeps track of tech job cuts, says that more than 120,000 jobs have been lost worldwide.
Companies let people go for different reasons, but there are some common threads.
During the pandemic, the tech giants’ businesses increased as more of our lives moved online. And executives thought things would keep going well for them.
In the first nine months of this year, Meta, for example, hired more than 15,000 people.
Now, executives who have announced layoffs have said they made a mistake.
Market shifts impacted jobs
Many tech companies make most of their money from online ads, but dark clouds have been gathering. Advertising practices that are too intrusive are getting more and more criticism. Apple, for example, made it harder to keep track of what people do online and sell that information to advertisers.
As the economy worsened, many companies cut back on how much they spent on online advertising.
Rising interest rates have also hurt companies in the financial technology field.
Even Apple is being careful. CEO Tim Cook said the company was still hiring, but only when necessary.
Amazon said that a strange and uncertain macroeconomic environment made it have to focus on what customers consider important.
Reduce the fat
Investors have also put more pressure on companies to cut costs. They say companies are too big and take too long to respond to signs of a slowdown.
Sir Christopher Hohn, an activist investor, wrote an open letter to Alphabet, the company that owns Google and YouTube, asking it to cut jobs and pay.
He wrote that Alphabet needed to be more careful with its costs and cut losses from projects like Waymo, which makes self-driving cars.
Elon Musk thinks that his latest investment, Twitter, which has had trouble making money and getting new users, has room to cut costs.
Also, many say that Mr. Musk paid too much for the company, so there is pressure to make his investment pay off.
He fired half the people who worked for the company, and those still there will have to work “extremely” hard.
US media said on Tuesday that Mr. Musk told his employees that they either had to join his “hardcore” culture of “long hours at high intensity” or quit.
No more blue skies
Scott Kessler, who keeps an eye on the business world, also says that people are less willing to spend much money on high-tech risks like virtual reality or driverless cars that might only pay off after some time.
Investors also think that the high wages and nice perks that some people in the industry need help to keep up.
WorkForce Software’s Mike Morini said it looked like a turning point. WorkForce Software makes tools for digital management.
“The tech industry is leaving behind a time of growth,” he said.
But even though the economy may hurt the big tech companies, they are not broken.
Amazon wants to cut 10,000 corporate and technology jobs. This would be its most significant cut to date, but it would only affect 3% of its office staff.
Layoffs may also be the start of new businesses if talented workers who were let go by big companies join or start new businesses.
Mike Malone, a follower of Silicon Valley for a long time, recently told the BBC that he would wait to write off the Valley.