Imagine tech layoffs in 2022
There’s even a standalone website that keeps track of everything Technical layoffs in the United States of America.
For the purposes of this graph, we have used data from trueup.io Which includes a mix of US and international tech companies that let workers go in 2022.
A Thousand Cuts: Mass layoffs by tech companies
Layoffs have an impact on the entire technology industry, and the phenomenon is global. Here are some notable examples of mass layoffs in 2022:
Meta: The social media giant faces competition from startups like TikTok, as well as a host of shrinking advertising dollars in the face of a faltering economy. While this staff reduction is painful for Meta, it’s worth considering in a broader perspective. In nearly two decades of doing business, these will be the company’s first large-scale job cuts.
Twitter: While Meta wins a slew of cuts, Twitter’s mass layoffs are certainly the most exciting. In early November, the company’s new owner, Elon Musk, cut 50% of the workforce, and soon after, thousands of contractors suddenly lost their jobs. Estimating how many employees remain in the company will remain a challenge until the dust settles.
Byju’s: Layoffs aren’t just limited to the United States. India’s large tech sector is also facing cuts. Education technology giant Byju’s laid off 2,500 employees in October — about 5% of its total workforce.
Peloton: The high-end exercise equipment company shed its headcount over the course of the year. In the above visualization, companies like Meta stand out because they shed thousands of employees all at once. However, the peloton implemented layoffs in stages throughout the year. After strong growth during the pandemic began to stagnate, the company began downsizing to restore profitability.
Why do tech companies lay off so many people?
The stated reasons for letting so many workers go are economic uncertainty (external factors) and poor performance (internal factors).
Goldman Sachs Research pointing to That “higher interest rates and tighter financial conditions disproportionately impact the sector because technology companies’ profits are typically more predictable in the future and therefore subject to longer risks.”
Shrinking advertising budgets and the collapse of the cryptocurrency market are factors that may have influenced the decision to cut staff. Twitter and Snapchat fall into the former group, while Coinbase and Kraken fall into the latter.
What do these job cuts mean for the economy?
On the surface, widespread layoffs in the tech sector might sound like a bad omen for the broader economy — especially given the outsized influence of tech companies in the markets.
Fortunately, this does not appear to be the case. Payroll and wages data released by the US government exceeded expectations, and the country’s unemployment rate approached its lowest level in half a century.
Why the interruption?
First, tech jobs alone account for less than 3% of all employment in America. Also, tech workers who have lost their jobs have a high probability of securing a new job in a short time.
It remains to be seen if November will be the peak of job cuts. Employers generally try to avoid letting people go right before the holiday season. One week in December, Trueup.io tracked 7,600 additional layoffs.