The pandemic-led boom that boosted tech companies and their valuations has now turned into a bust in the face of decades-high inflation and rapidly rising interest rates.
One of the big news stories these days has been Elon Musk’s takeover of Twitter and mass layoffs at the social platform.
However, Twitter isn’t the only tech company making drastic changes to its staffing right now.
In fact, there’s an ongoing trend across tech companies which is seeing mass layoffs and hiring freezes.
Why are so many tech companies cutting back on staff?
When it comes to careers, tech has long been advertised as a safe bet in job security.
Fast-moving days and fluid when it comes to choice, it can undoubtedly be a stressful working environment - but the pay is generally good and, ultimately, the world will always need people who can work in tech.
So it seems strange that in 2022, the era of the James Webb Telescope and robots who can interact like actual humans, so many companies across the sector are making cuts and instigating hiring freezes.
The household names recently include Amazon, Apple, Google, Meta, Microsoft and Twitter.
The reason? Unfortunately, the same reason we’re seeing this trend across the board in business right now.
High interest rates and the cost of living crisis means consumers are spending less money. That, in turn, impacts the revenue of these companies. Less revenue, of course, means businesses need to cut costs.
The current climate seems to indicate that investors are bracing themselves for the upcoming economic downturn - and potential recession that follows.
Planning for the worst?
That seems to be the general consensus. While a full-scale recession is still just speculation, when big names like Amazon, Apple and Microsoft - some of the richest companies in the world - announce layoffs and hiring freezes, it can feel like the inevitable is happening.
The key tech companies announcing layoffs and hiring freezes
For the first time in its history, social media giant Meta announced this week it would lay off 11,000 workers, or roughly 13 per cent of its staff. This marks one of the biggest tech layoffs this year, as the company grapples with a weak advertising market and mounting costs.
The company will make reductions in all of its businesses (such as WhatsApp, Facebook, and Instagram), said CEO Mark Zuckerberg. Meta is also prolonging its hiring freeze through to the first quarter of 2023, with a few exceptions.
Elon Musk began staff layoffs on Friday (November 4) as part of his new, self-appointed role of “Chief Twit”- or rather “Twitter Complaint Hotline Operator” according to his Twitter bio.
The company has laid off half its workforce, but said cuts were smaller in the team responsible for preventing the spread of misinformation. Several privacy and compliance officers have also quit, as well as the company's trust and safety leader.
The e-commerce giant has halted “new incremental” hiring across its workforce.
Following a months-long review, Amazon has told employees in some unprofitable units to look for jobs elsewhere in the company, the Wall Street Journal reported on Thursday (November 10).
It is also moving to redeploy staff from certain teams to more profitable areas, and closing teams in areas such as robotics and retail.
Apple has "paused almost all hiring," a decision that could last until late 2023.
The last time BT made some job cuts in 2018, the firm slashed 13,000 roles over three years as part of a cost reduction strategy. Now, it’s likely to be making even more layoffs.
Lyft announced at the start of November it would be cutting 700 jobs.
Last month, Microsoft cut about 1,000 jobs.