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The month of September 2024 will be remembered for its historic number of layoffs all through Silicon Valley and beyond. As of September, the biggest companies like Meta and Google have made pivotal decisions in cutting jobs.
At this point in time, thousands of workers from companies like Meta, Google, Amazon, and Microsoft have suddenly found themselves out of jobs. This decision marks a stark contrast to the seemingly unstoppable growth that has characterized the sector for the past decade.
Now, the wave of layoffs seems to be at its peak and we’re wondering why. Let’s take a look at this mega-shift.
What once looked like a recession-proof industry is now grappling with the after-effects of the global pandemic. The tech industry has now found itself in and around challenges that have forced even the largest firms to make tough decisions.
Some say the lingering effect of COVID-19 is responsible for this economic shift with inflation on the rise and interest rates at an all-time high. Also, as venture funding has slowed and stock prices have dropped, companies have come under increasing pressure to cut costs and focus on profitability over expansion.
According to industry reports, in September alone, more than 50,000 workers from major tech firms lost their jobs. These layoffs came from a variety of departments, including engineering, marketing, sales, and operations. Here is a brief list of major tech firm and their layoff:
Meta: (formerly Facebook) announced the largest single layoff in its history, cutting 12,000 jobs in a bid to reduce overhead and refocus on its core business.
Amazon: the e-commerce and cloud computing giant, eliminated more than 10,000 roles within its Amazon Web Services (AWS) division. Despite AWS being a major profit centre, Amazon cited internal restructuring needs for the company to reconsider its workforce size.
Google: Its parent company, Alphabet, shed approximately 8,000 jobs in September. Most of these cuts targeted middle management and less profitable areas of the business. With a growing emphasis on artificial intelligence and future technologies, Google has prioritized resources toward these sectors while trimming departments it sees as underperforming.
Microsoft: another tech behemoth, let go of 6,500 employees in its September layoffs. The company's gaming and hardware division made the biggest cuts.
a. Over-hiring During COVID-19: During the pandemic, many tech and other companies hired employees in bulk due to the rising need for digital services. However, since the pandemic, the world has now returned to a new normal and the needs just aren’t the same.
b. The AI and Automation Charge: With new technology being infused into the market every day, AI and its integrated automation have become the reason for lowering the need for manual labour. Especially in areas of customer service, analytics, and routine software development, companies are taking the root of layoffs.
c. Ad Revenue Decline: Digital advertising, once the bread and butter of companies like Meta and Google, has also seen a slowdown. This can be attributed to both the global economic downturn and changes in privacy policies.
d. Return on Investment: Each company, when backed by investors for funding also require Companies that had previously prioritized growth and expansion are now being forced to show profits, and one of the quickest ways to cut costs is by reducing headcount. to show returns and profits.
With this change in the economy, investors and employees alike will be on the edge of their seats for the next few months. As tech giants find a way to ride this turbulent way and find a more sustainable work environment and profitability.
