The rise in the number of layoffs by tech companies has raised questions about the future of the job market and how long it will last
Inflation, tumultuous stock market, high competition, pandemic, what option can explain the reason for the layoffs? Or better, The layoffs are only temporary, or will start to increase the number around the world and get a labor crisis? There are many questions about layoffs currently, but none of them can explain precisely the cause or purpose of this.
Whether we search in the dictionary, the definition of layoff is a temporary or permanent discharge of an employee due to an economic situation, change of shareholders, or to overcome a crisis. Since 2022, after most companies start to return to their offices, a massive number of employees start to get fired suddenly. In their resume, they were working, and on another day through emails, group meetings, or a letter, there was an announcement about the layoffs.
These layoffs have been affecting tech companies in different countries such as the USA, England, France, Brazil, India, Canada, Germany, etc. Not only startups are in the group of layoffs, but also big companies such as Meta, Google, Twitter, Salesforce, Booking.com, and Amazon.
On LinkedIn is possible to read some comments that most of these companies did a huge investment recently in advertising, and later on layoffs those employees. Also, we can see people mentioned about recently the quantity of recruitment, which could not justify the reason for the sudden fall.
According to the website Layoff.fyi, which tracks layoffs around the world since the pandemic, in 2022, 1024 tech companies laid off 154336 employees. In less than 1 month, 2023 already registered 26061 laid off employees, from 104 different tech companies.
On 17th January 2023, Microsoft announced the layoff of 5% of their workforce, which means 11000 people lost their jobs. Along with this, after Elon Musk Twitter acquisition, 3700 employees received the news of not being part of Twitter’s workforce anymore. From this list, 18000 employees from Amazon, 11000 from Meta, 8000 from Salesforce, 4375 from Booking.com, and 4100 from Cisco are the largest layoffs carried out to date. And, last week Google laid off 12000 employees. Right now, only Apple did not lay off any of their workforce.
The situation has caused fear and question about the future of the labor market, people do not know what is coming or even how to find a new opportunity. Also, the fact of many moved to a new country only for working in that determinate company or they are living with work permission is damaging their mental health about the possibility of deportation.
Surrounding this anxious environment, a support chain has been made through those unbeneficial from the layoffs and they create an online sheet to help each other overcome and indicate for a new position. The majority of layoffs occur in the technology, marketing, HR, and recruiting departments.
According to specialists, there is no determined prediction about the stopping date. Many countries have been living in an economic crisis, but there are no expectations if this is a long or short-term situation. People live with anxiety due to no security on their job guarantee, guiding questions about how they can change feel comfortable while they do not have sure if their name is going to be on the layoff list.
Reasons for explaining the layoffs in accordance with experts:
The post covid can be one reasonable reason since during the pandemic of Covid-19, companies began to adhere to the “home office”, to ensure the quality of life of their employees. In different countries, policies about health security and avoiding crowded areas, led people to “stay at home”. Working from home was very acceptable during the situation, and people starts to understand valuable time.
At that time, streams on YouTube, Netflix, Disney+, Amazon prime, and many other tv channels, decided to boost their advertisement and invest more in TV shows. Also, shopping online, online banks, games, and several online operations started to grow their business due to the facilities of receiving and doing everything from home.
In resume, the companies that benefited during the pandemic began to hire a large number of employees to work in the hybrid model or 100% remote, to supply needs and, of course, feed the market of people who stayed at home and had more time. However, in 2021, people started to return to their local offices, and what we would consider a “normal life”.
So companies invested in hiring those employees, however, right now, they are analyzing the necessity of overstaffing their business. Amazon laid off 10000 staff in November of 2022, and already at the beginning of this year, 2023, more than 8000, most of them from HR or Amazon’s large online shopping division. Principally, Amazon lost 1 trillion of market value, which made them become the first public company to lose.
Specialists reckon that was an overestimation of the market expectations. However, these layoffs mean a lot for shareholders since they can reduce the payrolls and save the company’s reputation through the uncertain future market. The profits will be more important than anyone else, while the company is surviving this is more relevant.
In accordance with Forber’s article, for startups, this downsizing is more worrying as it could be a sign of trouble ahead. In summary, it is more complicated to understand which of these layoffs is a benefit of being part of the business journey cycle and which is perhaps a sign of future bankruptcy.
Work as a freelancer
Exploring new possibilities is a new beginner for those who got affected by the layoffs. For example, freelancing is a great opportunity, since many companies have been hiring for specific or short projects. Meanwhile, you can guarantee income for your month and work from home.
Freelance provides you autonomy, flexibility, and development, furthermore, you will be able to seek opportunities according to your skills, and some ability that can support that project. If you never worked as a freelancer, you can try and then decide if you prefer being a formal worker with a labor contract, or keep following your career journey as a freelancer.
On Remotify, you can create a profile, add your skills and goals, check the opportunities that fit your profile, define your rate per project or hour, bid on your order, create an invoice, and receive your payment only using our platform. Freelancing is the future of work.
We are here to support any person who got affected by the layoffs, and of course, hope that each of these people rediscovers themselves and overcomes this difficult phase. If you know of any recent layoff, or if you passed through it, you can fill out this form here. In addition, check the companies and track the news of layoffs on this website.