Employee Layoff By Tech Companies: A Matter Of Concern

The past decades have shown an immense boom in tech companies, thereby making it a reliable source to contribute to the overall development of the economy. But with a spontaneous shift in the trend, the biggest tech companies are cutting down their employee base as a part of their modification efforts to balance with the downturn in the global economy. The happening was the central point of discussion as it is a great concern for many people who depend on the technological sector and its development to raise their standards of living. Let us look at the cause, concerns, criticisms, clarifications, and conclusions for this major happening.

What has happened so far?

The post-pandemic year 2022 has witnessed a massive reduction in employee numbers by the major tech saviors. This year more than 121,000 employees from 800 tech companies have been fired, the highest number of layoffs was marked in November. Meta is currently at the top of the list after it announced that it would lay off at least 11,000 employees. Many studies by economists suggest that Amazon has plans to lay off about 10,000 employees by the end of this year and is making efforts to put more attention on the company’s devices unit and several products including Alexa and other appliances, as well as the retail division and the e-commerce giant’s human resources department. Amazon laying off employees is significant as it has previously been the most stable employer in tech and if confirmed this would be the biggest layoffs in company history. 

This strategy was continued by Twitter as the reports later confirmed the firing of at least 50 percent of their workforce after Elon Musk took over the microblogging platform in a $44 billion deal. Microsoft had also laid off nearly 1,000 employees across different units. Other major companies like Snap Inc and INTEL are making preparations to follow the strategy of employee layoff.

The cause: From the pandemic boom to the layoff season

The wrecks of the pandemic were disappointing but to a great extent, it had ceased the unemployment issues and enhanced the ratios of hiring. During the pandemic period even though everything was shut down and slowed there was a massive increase in the amount of time each person spent doing online browsing and shopping which eventually increased the potential of advertising and resulted in a boom in the technological sector. This boom led the companies to increase the hiring process and many got placed in well-established companies. But now the boom is slowly fading as people get back to their normal lifestyle, cutting down their time invested in online activities. Therefore decrease in the e-commerce activities is a major reason for the current shift.

              Another important reason for the current shift in the technological sector is the soaring inflation in the US which has forced brands to reduce the amount they spend on advertising. Layoffs are the sudden action a company takes when the demand for its product and services decreases. Cutting down the employees is the easiest way before investors to cut down expenses. In the present age, it is considered a strategy to lay off employees to increase or balance the profit of the organization.

The Growing concerns 

The sudden layoffs by the companies are a great concern for the economic stability of the country, as many employees are working in the golden heirs of silicon valley. A parallel reduction in the employee numbers will reduce the amount of revenue the country gets through the human resource working in the sector. Another important concern is the unemployment crisis, the happening will charge over the country. Since a large number of people are about to lose their jobs there is a chance of big competition to get placed and other companies will also adopt the strategy of these big companies and will reduce the amount of workforce. Laying off employees can have a significant negative effect on customer retention. The layoff of the employees sends out a message to customers that it is undergoing some sort of crisis. The action can impact the existing workforce too, the person who is laid off suffers the most distress, but the employees who survived the layoffs suffer emotional stress as well as they have more concern over their existence in the company. 

Conclusions

With these tech layoffs coming constantly like waves and each company announcing the reduction of employees it can cause adverse effects on the company’s legacy too. The response of the investors to the changes might be different, but it is a season of layoff and reduction. Every boom is followed by a gloom and the gloom will bloom one day, the current scenario is the effect of the massive boom that slowed down after the pandemic. With time the economy will get back with firm roots of stability thereby taking the economy and people back to normal.