We argued that tech companies have been copying each other in terms of the number of workers they lay off, starting as early as 2020 during the beginning of the COVID-19 pandemic. This can largely be described as copycat behavior, where one company in the technology industry lays off a significant number of employees, leading to other companies in the same or related industries following suit and doing the same.
Several reasons have been given for these cases:
- Economic downturns or market changes have affected multiple companies in tech.
- Companies seeking to cut costs and improve their financial performance by reducing their workforce.
- Fear of falling behind competitors who have already implemented layoffs.
The negative effects of these layoffs have already been seen. For instance, a large number of people have lost their jobs in a short period of time. There is also a case of a negative impact on the morale and productivity of the remaining employees, which was made clear say when Elon Musk took over Twitter and fired a substantial number of employees.
As said, tens of thousands of people were laid off in 2022, and this activity has been brought into 2023.
On January 18, Microsoft announced plans to let go of 10,000 employees in the current year, which is around 5% of its global workforce. According to the company, the layoffs are a result of the current economic conditions and shifts in customer needs. The cuts were announced via a memo to workers by CEO Satya Nadella.
Two days later, Alphabet Inc., the parent company of Google, announced that it will be cutting around 12,000 jobs, which is approximately 6% of its workforce.
Google’s CEO Sundar Pichai expressed regret for the decision in an email and memo to employees, saying that it will mean losing some highly talented people and that it weighs heavily on him.
He explained that the company is facing difficult economic cycles and that the decision was made to re-engineer the cost base and focus on the highest priorities.
In January 2023, ecommerce powerhouse Amazon revealed plans to eliminate more than 18,000 positions, including layoffs announced in November.
The majority of the cuts will be in the Amazon Stores and People Experience and Technology Solutions teams, as stated in an email from Amazon CEO Andy Jassy to employees.
Jassy had previously cautioned in November that job cuts at the company would continue in early 2023. Amazon currently has around 1.5 million employees worldwide.
Vox Media is a company that owns popular publications such as The Verge and Polygon.
In a tweet, a workers’ union said that the company informed them that it will be laying off around 7% of its workforce and some of their members have been affected.
They expressed their anger at the way the company handled the layoffs and are currently discussing how to support those who have lost their jobs.
Coinbase, a platform for trading cryptocurrencies, announced on January 10 that it will be laying off 950 employees, according to a statement from CEO Brian Armstrong.
Armstrong explained in the statement that as they were planning for 2023, they realized that they needed to reduce expenses to ensure success in all scenarios.
He added that it is difficult to make significant expense reductions without also reducing the number of employees.