Massive layoffs in the tech industry : which companies are concerned and why

The Wall Street Journal said that the IT industry, which has been most impacted by layoffs, is currently losing workers at a greater rate than at any other time during the epidemic. Data from, a website that tracks layoffs from the start of the epidemic, showed that IT businesses cut more than 150,000 jobs in 2022 alone, compared to 80,000 in 2020 and 15,000 in 2021.

List of some companies concerned

Google: 12,000 workers

On January 20, Sundar Pichai, CEO of Alphabet, the parent company of Google, notified colleagues that 12,000 workers, or 6% of its worldwide workforce, will be let go. Pichai stated in a message to staff that the layoffs were chosen following a "rigorous examination" and will "cut across Alphabet, product categories, functions, levels, and geographies."

Microsoft: 10,000 workers

Microsoft declared on January 18 that it will cut 10,000 positions from its employees by the end of the third quarter of this year. CEO Satya Nadella explained the layoffs as a result of consumers making fewer spending decisions in advance of a recession. Nadella said in a letter to employees that despite the firings, the firm still intends to expand in some sectors and that it will "continue to hire in essential strategic areas." The IT giant is apparently in discussions to invest $10 billion in OpenAI, the company behind the AI chatbot ChatGPT, at the same time that Microsoft announces job cuts.

Amazon: 18,000 workers

CEO Andy Jassy announced the business will lay off more than 18,000 workers in total in a message to staff members, which was much more than what had been anticipated based on information from the New York Times. Jassy attributed the layoffs on "the unpredictable economy" and quick recruiting. Although the majority of Amazon's 1.5 million employees work in warehouses, the corporate groups are where the majority of the layoffs are occurring. Amazon started making cuts late last year, and according to the Wall Street Journal, they will extend into the first few weeks of 2023. In the latest wave of layoffs, Amazon's 18,000 employment losses are the most significant of any big internet business.

PayPal:  2,000 workers

On January 31, PayPal disclosed that it will be laying off around 7% of its whole staff, in the upcoming weeks. PayPal's CEO and president, Dan Schulman, noted the "difficult macro-economic climate" in a statement announcing the layoffs. While we have made significant progress in right-sizing our cost structure and concentrating our resources on our key strategic goals, there is still work to be done, he continued.

SAP: 3,000 workers

In reaction to a drop in profits, software major SAP said on January 26 that it will eliminate up to 3,000 employees internationally, with many of the reductions occurring outside of its Berlin headquarters, according to the Wall Street Journal. According to the Journal, SAP's chief financial officer, Luka Mucic, stated that the goal was to "further focus on key growth areas."

To summarize, here are the main reasons explaining the tech industry layoffs : 

  • Economic instability and a halt in corporate activity are results of the ongoing COVID-19 epidemic. This has compelled several businesses to decrease expenses, including staff.

  • Business goals are continuously shifting, and this necessitates staff adjustments for technology organizations. For instance, a business could decide to focus on a different product line, which might lead to job cuts in one area and recruiting in another.

  • Redundancies and overlapping positions may occur as a result of mergers and acquisitions between two businesses. Some staff may be let go in order to reduce these redundancies.

  • Automation and artificial intelligence: As these technologies are used more often, certain occupations have been displaced by technology. Therefore, businesses could fire employees whose jobs have been mechanized.

  • Companies may sometimes fire employees as part of a bigger restructuring or reorganization exercise designed to streamline operations and boost productivity.

It's crucial to remember that layoffs may be bad for the impacted employees as well as the economy as a whole. However, because the technology sector is continually changing and there are always new possibilities, laid-off individuals may be able to find new positions in industries that are similar.

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