The technology industry is continuing to lay off thousands of employees, and is approaching 150,000 employees lost in the first three months of 2023.
The e-commerce and streaming giant Amazon announced layoffs of 9,000 employees on Monday. Meta, which owns Facebook and Instagram, announced 10,000 job cuts a week earlier, on March 14.
As of Tuesday, 505 companies across the tech industry had cut 148,180 employees from their payroll in 2023, according to data compiled by Layoffs.fyi reported. Of U.S. tech companies, 324 accounted for 109,366 job losses, according to Layoffs.fyi’s data.
Around this time last month, total tech industry layoffs for 2023 had hit 109,000 jobs, including 84,262 across about 250 companies in the United States.
At the current pace, tech industry job losses in 2023 are set to soon surpass the 160,997 jobs the industry lost in 2022. If the trends continue, tech industry job losses in 2023 could surpass the losses in 2022 by around 300 percent.
It remains to be seen if the trend of job losses will continue or if the situation will stabilize.
As he announced the staff cuts at Dell last month, Co-Chief Operating Officer Jeff Clarke said “market conditions continue to erode with an uncertain future” and the steps the company had taken to that point to stay ahead of the downturn were “no longer enough.”
After buying out Twitter last year, Elon Musk went on to lay off about half of Twitter’s workforce. In a Twitter post on Feb. 5, Musk wrote that he had saved the social media platform from bankruptcy and that the company is “now trending to breakeven if we keep at it.” By Feb. 25, Twitter reportedly initiated another round of layoffs, with plans to cut at least 200 more employees.
The widespread tech industry layoffs could be the result of a correction after pandemic-era over-hiring. Online commerce saw a spike in 2020, as many Americans were confined to their homes. Salesforce Co-CEO Marc Benioff has attributed his company’s recent job losses to over-hiring, as has Meta CEO Mark Zuckerberg.
While commercial tech industry companies are losing jobs by the tens of thousands, the U.S. National Security Agency (NSA) may alleviate some of the losses. On Jan. 24, the military intelligence agency announced it “is undertaking one of its largest hiring surges in 30 years with openings for over 3,000 new employees,” including openings for computer science, cybersecurity, math, data science, intelligence analysis, language analysis, communications, business, and accounting, with entry-, mid-, and senior-level positions.
Silicon Valley Bank Collapse
The recent collapse of Silicon Valley Bank (SVB) could be a byproduct of the overall challenges the tech industry is facing or a warning sign for more layoffs ahead.
SVB had heavily catered to the tech industry, which has grown out of Santa Clara Valley in California, eponymously named the “Silicon Valley” for its heavy concentration of people and companies working with silicon-based computer chips. As The Guardian reported, SVB had served as the bank of choice for nearly half of all venture-based tech startups.
Banks only keep a fraction of the total value of their deposits on hand to accommodate periodic small withdrawals by depositors while they invest the rest of those deposits in the hopes of turning a larger profit. SVB had held a large portion of its depositors’ money in various investments that it could not easily sell off if the need arose for them to return a large portion of the money to its depositors. Raised interest rates have made it harder for start-ups to borrow more money, leading them to draw more heavily from their own bank accounts to make ends meet financially. SVB began selling off some of its own investments at a loss in order to have enough money on hand to pay back its depositors, and as news grew that the bank was struggling to keep up, it created a run on the bank where depositors sought to pull their money out before the bank collapsed, exacerbating SVB’s struggle to pay out depositors’ money withdrawals.
Shortly after SVB’s collapse, the Federal Deposit Insurance Corporation (FDIC) took over and forced the closure of Signature Bank in New York. Signature Bank had invested heavily in cryptocurrency, which runs on computing software and is a component of the tech industry. Cryptocurrency has also faced challenges in recent months.
From NTD News
