Human capital in the technology industry has been increasingly threatened by the massive staff cuts made by large technology companies such as Meta, Amazon and Twitter, since from the beginning of 2022 to the present, these types of companies laid off around 150,000 employees, according to the Layoff platform, which attaches information from various media and official company reports to show an estimate of layoffs in the sector.
Experts point out that the uncertainty in the economic outlook due to the war in Ukraine, the aggressive increases in interest rates to combat the inflationary spiral and the specter of recession in world economies have been the main reasons for the layoffs announced by the technological ones as a consequence of an increase in the costs in their balance sheets. On the other hand, the accelerated growth of this sector in the last two years in the midst of the COVID-19 pandemic also helped form the perfect storm in an industry that was not affected by the global health restrictions at work.
According to Layoff, more than 1,000 companies in the technology industry have announced layoffs throughout 2022 and early 2023, with around 153,678 jobs lost in this type of company. The most recent mass layoff was at Amazon, where it raised to 18,000 the number of workers it will cut from its payroll after announcing 10,000 layoffs in November.
Among the personnel adjustments that companies made at the end of 2022, the 11,000 layoffs announced by Meta, the parent company of Facebook, Instagram, WhatsApp and Messenger; 7 thousand 500 more by Twitter after the modifications made by Elon Musk after buying the company and the 4 thousand by the telecommunications company Cisco.
Several experts in the field point out that the sector is not going through a hiring crisis, since the demand for technological employees remains high, however, many of the companies grew rapidly during the pandemic, or made a change of position. strategy in the face of high competitiveness in the industry. For example, Meta has had problems with Facebook after the irruption of other social networks in the market.
Faced with such a scenario, the founder of Facebook, Mark Zuckerberg, took a radical turn in his business strategy and went from hiring more than 15,000 employees in the first months of 2022 to announcing the dismissal of 11,000 at the end of the same year. In September Meta had a 36% drop in profits compared to the same period in 2021, making it one of the five big technology companies (the others are Alphabet, Amazon, Microsoft and Apple) that had the most losses. If in 2021 the profits of these five big technology companies had grown compared to 2020, in 2022 they have fallen.
These five companies have registered a joint profit of 179 thousand 897 million euros, 19.3% less than in the same period of 2021, where the increase in operating costs is positioned as the first cause.
According to the Layoffs platform, most of the companies that carried out massive layoffs are based in the United States, but layoffs were also registered in companies whose headquarters were located in Germany, Brazil, Canada, the Netherlands, among other countries, making it clear that it is a phenomenon that the technological sector faces worldwide.
On the other hand, experts say that despite being in a crisis of massive layoffs, the talent of the technology industry has an area of opportunity to enter other sectors that are committed to digitization, since this phenomenon is mainly affecting companies focused on technology, but there are other industries that do not focus on this sector and have the need to hire technological talent, which opens a window of opportunities for technological workers and it will only be a matter of relocating to the labor market.
BLACKROCK, THE LAST TO JOIN THE TREND
The financial firm BlackRock recently announced that it would lay off 500 employees, which translates to 2.5% of its payroll, adding to the long list of technology and financial companies that have executed staff cuts.
Like many of the aforementioned companies, BlackRock had hired a large number of employees in recent times, increasing its workforce by more than 20% over the past three years. The company had accumulated between January and September 2022 a net profit of 4 thousand 35 million dollars, 12.3% less than in the same period of the previous year.
We would like to thank the writer of this article for this incredible web content
Mass layoffs, topic of the moment