The great years of plenty are over as mass tech firm layoffs surge

Forget the great resignation, it’s the mass layoff. Experienced tech industry workers have long enjoyed being on the supply end of a demand-and-supply chain in their favor. Yet, a spate of mass terminations across industry giants is gaining momentum.

Elon Musk’s highly publicized reduction of his newly-acquired Twitter team looked like a one-off given the site’s unprofitability and the vast amount of money he sunk into it, but Meta, Amazon, and Disney have now followed suit, as well as ZenDesk, Lyft, Stripe, Snap, and more.

These aren’t tiny cuts; Zuckerberg’s Meta, the parent company of Facebook and Instagram, said it would sack 11,000 employees, equating to 13% of its workforce. Zuckerberg said the work-from-home impact of COVID-19 boosted Meta’s coffers, but as e-commerce trended back towards pre-COVID levels advertising revenue dwindled in comparison to the company’s spending on the Metaverse. Zuckerberg says there will be a hiring freeze in place until at least the end of the first quarter.

Now Amazon has announced plans to lay off around 10,000 of its workforce focusing on the devices organization, retail division, and human resources. While, for now, it would appear its massive cloud arm, AWS, is exempt, the Kindle and Alexa devices are not. Depending on how one measures Amazon’s size, the cuts represent about 3% of its corporate employees or less than 1% of its global workforce of more than 1.5 million people, but that figure includes vast numbers of hourly workers.

Even so, it’s troubling that Amazon has come to this position where it is retrenching workers during the critical Christmas holiday season, a time when it typically values ​​stability to meet demand.

It’s a very different situation than that only a few months ago when Amazon doubled the cap on its tech workers’ cash component, citing a particularly competitive market.

And, even entertainment giant Disney is not exempt. The house of mouse is planning to freeze hiring and look at job cuts as it seeks to manage costs while striving to bring its streaming service Disney+ to profitability despite an uncertain economic landscape. This follows a drop in Disney shares by 13% after it reported missed revenue targets after incurring losses from Disney+.

Zendesk disclosed in a filing to the Securities and Exchange Commission that it approved a plan to eliminate about 300 positions, or about 4.9% of its total global workforce, in a push to cut costs. While not the same size as the companies above, it’s no slouch by any means with 2021 revenue of US$1.34 billion.

These are not all; Lyft, Stripe, and Snap have also announced similar cuts, and signs are that this is simply the tip of the iceberg.

While once these massive tech firms were competing to gobble up the largest number of the best and brightest recruits, that’s all in the past as layoffs surge.

Whatever happens next, one thing is for sure: the global economy’s downward momentum is exposing the cracks in companies that had enough fat in their revenue to mask their overstaffing and underdelivering. Who will be next?

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