The layoffs at technology companies that started in 2022 intensified in 2023, with companies cutting more than 125,000 jobs in January and February alone, compared to 160,000 jobs cut in 2022.
During the pandemic, technology companies hired a lot more people to meet the high demand for their products and services.
The video conference company Zoom almost tripled its workforce from 2,500 employees at the end of January 2020 to nearly 6,800 employees as of January 31, 2022. In a similar way, other technology companies hired a lot more people than they should have compared to the rest of the economy. The most recent tech layoffs represent a right-sizing of the workforce in response to a decline in demand for the company’s goods and services.
Also read: This is a Great Time to Correct Compensation Without Layoffs: Sreekanth Arimanithaya, EY GDS
According to a recent worldwide study by pre-hire skill assessment tech company Xobin, over 575 tech companies across the globe are actively hiring and recruiting laid-off technology talents from large technology companies and FAANG (Facebook, Apple, Amazon, Netflix and Google).
The United States leads other countries with one-third of global technology hiring and is followed by the European Union (9.15%), India (8.43%), the UK (8.07%) and APAC (6.79%).
Almost three out of ten employers are hiring for engineering and software development roles. A quarter of new recruitments are for sales and marketing, while human resources, customer success, finance, operations, and design constitute the remaining new hires.
Dropbox, the cloud storage company, announced 11% job cuts in 2021 and ended the year with only 3% fewer employees than at the time of the announcements. Even the ten most prominent technology companies behind the recent largest layoff still employ over 150,000 more people than they did at the beginning of 2020.
Guruprakash Sivabalan, CEO of Xobin, attributed the layoffs to imitative behaviour. He pointed out that layoffs are not a secular trend across the industry, with many big tech companies not reducing their headcount with no intentions to do so in the immediate future. He is optimistic that the laid-off skilled technology workers will find new opportunities.
Many of the employees in the technology sector impacted by layoffs are in business functions rather than technology roles. Additionally, the net impact on the industry and the company’s workforce is less severe than it may look.
According to a study, the combined workforce of companies announcing layoffs usually shrinks less than projected by the end of the financial year. Dropbox, the cloud storage company, announced 11% job cuts in 2021 and ended the year with only 3% fewer employees than at the time of the announcements. Even the ten most prominent technology companies behind the recent largest layoff still employ over 150,000 more people than they did at the beginning of 2020.
