The wave of layoffs in technology companies spreads to other sectors

According to data from the website Layoffs.fyi, which monitors layoffs in the tech sector, tech companies laid off roughly 200,000 employees in 2022, while 210 tech companies laid off 67,268 people since the beginning of 2023.

Due to recession concerns and high inflation, layoffs are becoming a global problem.

Although the recession in the world economy, which began with the Covid-19 epidemic, has not lost its effect yet, concerns about inflation, rising interest rates, high energy prices and geopolitical issues They are causing fluctuations in the production of companies and in the markets.

DECREASE IN SALES OF THE COMPANY

Technology companies, which increased their business purchases due to increased e-commerce spending with the epidemic, are facing high inflation and rising interest rates with the rapid economic recovery after the epidemic.

While some companies struggled to find enough employees to meet the surge in demand for their products at the start of the Covid-19 outbreak, today unusually high inflation is eroding consumers’ ability to keep spending. This leads to a decrease in the sales of the companies.

Rapid increases in interest rates, coupled with weak consumer demand, are forcing companies like Amazon, Meta and Google, as well as major investment banks, to cut their workforces.

STEPS TO REDUCE COSTS

In addition, with the use of new technologies, especially artificial intelligence, in many jobs the need for some positions is eliminated, and this causes companies to reduce the number of employees.

In an environment of global economic uncertainty, companies are forced to take steps to reduce their costs while battling declining profits and dwindling cash reserves.

While the growing energy crisis with the war between Russia and Ukraine is holding back the global economy, many companies, especially in the US, Europe and Asia, continue to announce that they will take a break from new hires or reduce the number of employees. .

DISTRIBUTIONS INCREASE 129 PERCENT YEARLY IN DECEMBER

Amazon, Meta and Twitter laid off several thousand employees last year, while other tech companies are also trying to cut jobs.

According to a report released this month by Challenger, Gray & Christmas, a consulting firm that tracks announced or confirmed layoffs by companies in the telecommunications, electronics, and software development fields, job announcements in the US increased. up 129 percent in December of last year from a year ago. It’s close to 44,000.

Last year, layoff announcements totaled approximately 364,000, an increase of 13 percent over 2021. While the majority of layoff announcements came from technology companies, it was announced that more than 97,000 people from companies in this sector would be laid off in 2022, an increase of 649 percent compared to the previous year.

The automotive industry was the second sector to report the most layoffs, with 30,912 people last year. Companies in the health sector, for their part, announced the dismissal of 30,626 people in the same period.

MORE THAN 67 THOUSAND PEOPLE LOSE TECHNOLOGY JOBS

While new layoffs were quickly added to this year’s wave of layoffs, technology companies reported more than 67,000 job cuts in 2023 alone, according to data from the website Layoffs.fyi, which tracks layoffs in the technology sector. technology.

Announcing that it was laying off 10,000 people last year, Amazon announced that it plans to lay off more than 18,000 people, including the one it announced earlier this year.

Amazon announced that most of the layoffs will occur in stores and people, experience and technology (PXT) groups.

The American cloud-based software company, Salesforce, announced that it decided to reduce its workforce by 10 percent. While that rate corresponds to approximately 8,000 people, it was noted that the layoffs are expected to reduce the company’s costs by between $1.4 and $2.1 billion.

The Coinbase cryptocurrency exchange reported that it plans to lay off 950 more.
Crypto.com, on the other hand, said it will cut its workforce by 20 percent due to continued “headwinds” and unpredictable global economic conditions.

Microsoft, one of the American technology companies, also announced its plan to lay off 10,000 people, equivalent to about 5 percent of its employees, by the end of the third quarter of the year.

REDUCE LABOR AT SPOTIFY AND SAP

WeWork, a startup that provides companies with co-working space, including physical and virtual spaces, has announced plans to lay off 300 of its employees.

Alphabet, the parent company of US tech giant Google, announced it will lay off 12,000 employees.

Sweden-based music and podcast streaming service Spotify has decided to reorganize the company’s organization to achieve greater efficiency, manage costs and speed up decision-making. In this context, the company announced that it will lay off 6 percent of its employees.

The wave of layoffs hit investment banking after the looming recession with rising interest rates and falling revenues.

EXPLOSION IN GIANT BANKS

Morgan Stanley and Barclays quietly laid off their employees or announced plans to do so in the coming months.

Swiss investment bank Credit Suisse plans to lay off more than 10 percent of European investment bankers this year, after announcing last year that it would cut 9,000 jobs globally by 2025. This is expected to trigger the loss of hundreds of jobs in London and Zurich.

Goldman Sachs, one of the largest investment banks in the US, is reportedly planning to lay off more than 3,000 people this year.

Online home goods retailer Wayfair Inc. is reportedly preparing to announce a new round of layoffs in August 2022, after announcing it would lay off 870 people, representing about 5 percent of the global workforce.

IT ALSO HIT THE AUTOMOTIVE INDUSTRY

It was noted that the car manufacturer Ford will lay off 3,200 employees at its factory in Cologne, Germany, with the effect of increasing the costs of batteries for electric vehicles and the expected recession in the US and European economies.

The German company SAP is among the companies that will reduce the number of employees this year. The company said it will start a restructuring program that will reduce global headcount by 2.5 percent.
The American technology company IBM has also announced that it will lay off 3,900 jobs as part of some asset divestments.

The American chemical company Dow announced that it plans to lay off 2,000 of its employees worldwide this year in an effort to cut costs.

Vodafone Group plans to cut several hundred jobs, most of them at its London headquarters, the Financial Times reported.

Dow Jones, whose financial news organizations Wall Street Journal, Barron’s and MarketWatch, owned by News Corp, are considering laying off some of their employees to further grow in the restructuring.

DECISION GOAL TO REDUCE LABOR BY 13 PERCENT

Last year, tech giants like Meta, Twitter, Cisco, Philips also made layoffs.

In a Meta statement in November, the decision to reduce the workforce by 13 percent and lay off more than 11,000 employees was reported. On Twitter, more than 3,700 people were fired.

Cisco and Philips also announced plans to lay off about 4,000 people. In the US, companies like Netflix, Robinhood, Snap, Shopify, Peloton and Calm have also announced that they will reduce their workforce.

Netflix announced it would cut 450 employees, while Peloton announced it would cut more than 800 jobs, Robinhood by 23 percent, Snapchat by 20 percent, Shopify by 10 percent, Cameo by 25 percent and Calm in 20 percent. (AA)