The recent downsizings are a response to the vigorous hiring that took place, which was especially ... [+]
If you casually consume the news, you’d believe that tech is radically and indiscriminately slashing jobs. According to Layoffs.fyi, 200 tech-related companies laid off nearly 60,000 employees in 2023. The recent downsizings are a response to the vigorous hiring that took place throughout the years, which was significantly heightened during the pandemic.
Alphabet, the parent company of Google, announced 12,000 layoffs on Friday. While the number seems staggering, it’s still less than the net number of hires the search giant made in the third quarter of 2022, totaling 12,765. Alphabet has consecutively expanded its workforce at least 10% annually since 2013, according to CNBC. The company increased its headcount over 20% in 2018 and 2019. The growth continued, adding over 16,000 new hires in 2020 and 21,000 employees in 2021.
In a memo to his staff, Meta CEO Mark Zuckerberg announced in November that he was laying off 11,000 people, representing around 13% of his workforce. Since the company’s IPO in May 2012, Meta—then Facebook—has grown its employee count by thousands each year. In 2020, the social media platform increased headcount by 30%—13,000 workers. The following year, Meta added another 13,000 employees to its roster. Those two years marked the biggest growth in the company’s history.
Amazon has initiated its plan to separate more than 18,000 white-collar professionals from its payroll. The online-retail giant hired hundreds of thousands of workers during the pandemic, becoming the second-largest employer in the United States after Walmart. In 2020, Amazon hired an estimated 500,000 employees, according to GeekWire. A year later, the company expanded its workforce by 310,000. Prior to the recent layoffs, it was reported that Amazon employed 1.5 million workers, including corporate and warehouse staff.
Apple scaled its workforce at a slower pace compared to the other Big Tech companies and has generally followed the same hiring rate since 2016. Unlike its peers that hired aggressively during the pandemic, Apple added less than 7,000 jobs in 2020. In September 2022, it was reported that the company employed 164,000 workers, in both its corporate and retail divisions. In August, Apple announced that it was letting go of 100 contract recruiters. However, the tech company has not announced plans to make cuts to its staff.
What Happened?
In 2020, widespread pandemic lockdowns made people turn toward the internet and software applications. Students and workers were forced to adopt remote work styles. The pivot to going online was a field day for big tech companies, especially as small businesses were closed and people didn’t want to leave their homes. As profits soared, companies expanded their workforces to meet demands.
The war for talent during the Great Resignation pushed businesses to hire and retain workers, even if they didn’t meet all necessary job requirements. Managers realized that if they didn’t recruit and onboard people quickly, they’d lose out to their competitors. Flush with cheap and accessible capital, while also confronting a continual war for talent, companies hoarded workers when they had the opportunity.
Now that the Federal Reserve has turned off the spigot of printing money, the voracious rate at which companies were hiring is no longer sustainable. Unfortunately, the go-to, cost-cutting response is to trim the fat—and that is what is happening now in the tech industry.
Despite Rampant Layoffs, People Are Finding New Jobs
Although it may seem like many tech workers are losing their jobs, on a positive note, they are finding re-employment relatively quickly in a still tight job market. The Wall Street Journal reported most laid-off tech workers are finding new jobs shortly after beginning their search, according to a recent ZipRecruiter survey. The study shows that nearly 80% of downsized tech workers found new roles within three months of beginning their job search. On an encouraging and somewhat surprising note, about 40% of previously laid-off tech workers found jobs less than a month after they began searching, the ZipRecruiter data showed.
