Alphabet Inc. announced 12,000 layoffs Friday morning. This brings Google’s workforce back to where it was in the second half of last year.
12,000 would put many workers out of work, but still less than net employment Alphabet
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Last year’s third quarter alone brought the total to 12,765. This is just one example of why the layoffs announced by big tech companies in recent weeks, despite the sheer number of them in total, are unlikely to pose a similarly big problem for them and the larger economy. It’s not too much.
“When people hear layoffs, it’s a very evocative term. “The growth was all unexpected.” Now…and they are making adjustments.”
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These adjustments look big in terms of the number of layoffs, but not when compared to the number of people hired during the COVID-19 pandemic. The largest number ever announced by a major tech company is the projected 18,000 layoffs at Amazon.com Inc.
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— But Amazon has grown to become the second-largest employer in the U.S., employing hundreds of thousands of people during the pandemic, with 1.6 million last year.
Microsoft
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Increased workforce by more than 50% from mid-2019 to mid-2022, hiring approximately 77,000 employees. The company recently announced 10,000 layoffs. Facebook’s parent company, Meta Platforms Inc.
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has nearly doubled its headcount from about 45,000 at the end of 2019 to more than 87,000 by the end of the third quarter of 2022, before deciding to cut about 11,000 employees.
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Big tech companies that didn’t accelerate hiring during the pandemic aren’t planning similar layoffs. For example, Apple Inc.
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The company, which increased its headcount by less than 20% from the end of fiscal 2019 to the end of fiscal 2022, has not announced any significant layoffs.
The real question is whether there are jobs for laid-off tech workers, and the answer so far seems to be yes. According to the Job Openings and Labor Turnover Survey, job listings remain strong and the unemployment rate remains at its lowest level in decades. Tech jobs are on the rise even as industry job listings drop from record levels.
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Venture capital also continues to fund young tech companies that need experienced workers. More than $200 billion will be invested in young companies in 2022, second only to 2021, making 2022 the second-largest year for venture capital investment on record, EY reports. Investors say they are looking to invest in young start-ups amid the economic downturn and see it as an opportunity to build.
Established technology companies are still hiring. At the recent Davos meeting, the CEO of Palantir Technologies Inc.
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and Workday Co., Ltd.
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says it plans to hire more employees this year, despite a crash in enterprise software stocks.
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If the massive job cuts continue, wider pain could certainly spread, but the announcements so far and the larger economic impact observed suggest that a broader recession is still underway. not shown.
“I don’t see any signs of a bust. Mr. Hancock doesn’t see a recession in Silicon Valley, or even worse, a recession,” a view he called “informed speculation.” He added:
These adjustments affect real people, and some may lose their ability to stay in the United States if they cannot find another job in the short term. It’s a real turmoil and their lives have been massively disrupted and they’re going to go through a period of pain and upheaval,” Hancock said.
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But for everyone else, the economic impact looks minimal for now. With our annual forecast coming out in the coming days, along with holiday season returns, it should become clearer how much to worry about.