What do Twitter, Amazon, and Facebook parent company Meta have in common? Well, besides the obvious fact that they’re all major tech companies, all three firms have recently announced significant employee layoffs.
Massive Layoffs Strike Big Tech
Meta, which also owns WhatsApp and Instagram, announced the layoff of over 11,000 employees in early November. Following its purchase by billionaire Elon Musk, Twitter announced it was letting go nearly half of its 7,500-strong workforce, and Amazon recently announced plans to lay off around 10,000 employees. Other tech firms seeing recent layoffs include Stripe, Coinbase, Lyft, and many more.
Big tech has long been the darling of corporate America—displaying cutting edge technology and glittering profits. So, what’s the story behind the large-scale layoffs impacting so many of the top tech employers?
Factors Impacting Layoffs
There are a number of factors at play, including global economic uncertainty caused by armed conflict, a lingering pandemic, and disruption of global trade patterns. But the current downsizing may also be a predictable result of the COVID tech boom, which saw tech companies experience tremendous spikes in revenue and profitability amid global lockdowns that kept people around the world indoors, often with little to do besides browse social media and do some online shopping.
“In many ways, this major round of layoffs is fixing a previous mistake,” explains an article by Q.ai for Forbes. During the pandemic, Q.ai explains, for many, online interactions were their only interactions. “There was no commuting to the office, no bars on Saturday nights and no pickup basketball or dance recitals. We were all forced to stay home and we spent a lot more time online.” Going to the movies morphed into streaming movies online. Going out to eat became ordering in through Uber Eats or other such services.
Can We Blame Layoffs on the Pandemic?
“Despite the global turmoil,” the article continues, “this upsurge in online activity led to a boon for tech companies. They pulled in record levels of revenue, which created record profits and fueled a hiring frenzy that drove big salaries and benefits for engineers, developers and other tech workers.”
In other words, the current round of layoffs can be seen, at least in part, as a reaction to the economic upheaval created by the COVID-19 pandemic. While the pandemic raged, online activity surged. But that situation was never going to be permanent, and the current layoffs plaguing big tech reflect a broader return to “normal.”
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.