More than 24,000 tech workers across 72 companies have been laid off this month, NPR reported, totaling 120,000 tech jobs lost this year. Just last week, Meta laid off 13% of staff, or about 11,000 workers. In a letter to staff posted to the corporate website, CEO Mark Zuckerberg attributed layoffs to overhiring during the pandemic, NPR reported. He also cited a decline in e-commerce, the economic downturn, competition and lower ad sales.
Fintech company Stripe laid off 14% of its workforce and Lyft let nearly 700 of its employees go, Business Insider reported, noting that this was likely only the beginning.
Weak Earnings and Economic Turmoil
At a time when companies are planning for the next year, weak earnings are being reported across the tech industry and forecasts aren’t looking good. When this happens, Business Insider suggested that most companies will turn to layoffs to cut down on salary costs.
“When they cut costs, the first thing to go is typically labor costs and also advertising and marketing,” Dan Wang, an associate professor at the Columbia Business School, told Insider. Wang also noted that firing forecasts depend on how companies have seen the trend in advertising spending on their platforms. “When that doesn’t look good, then they have to accommodate those expectations by adjusting the workforces.”
So why wait until the holidays? Many of these companies are planning for the next year. For example, Insider indicated that Amazon, Meta and Google have fiscal years that conclude at the end of 2022 (or in early 2023) and may be looking for ways to get costs off the balance sheets before the fiscal year wraps up.
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