Tech layoff, other sectors boom

Posted by

Every few months during the pandemic, a video would go viral of a Big Tech employee sharing a “day in the life” where they dined on catered lunch, treated themselves to espresso, declined a company-sponsored massage, and appeared to do…not that much work. You don’t see many of those videos anymore.

Inflation, the Fed’s interest rate hikes in response to inflation, and the subsequent slowing of the economy all played a role in 2022 marking the apparent end of the tech industry’s blistering two decade growth run. This year about 150,000 tech workers were laid off from both major companies and smaller startups—including 51,000 in November alone.

That’s a troubling figure for what had been one of the economy’s strongest growth sectors, but economists don’t expect it to spell doom for other industries. Even as tech companies downsized, the broader labor market remained strong throughout the year, with the unemployment rate ticking up slightly, to just 3.7% as of November.

Mark Zuckerberg blamed himself for his company’s pandemic overstaffing when he told employees Meta would be culling 13% of its workforce, or 11,000 jobs. After the pandemic led to Amazon’s most profitable period in history (during which the company doubled its workforce over two years, per the NYT) the tech giant announced it would cut around 10,000 tech and corporate jobs—though internal rumors put the actual number around 20,000.

  • Other notable tech companies that laid off a significant portion of their workforce this year: Robinhood (31%), Snap (20%), Stripe (14%), Lyft (13%), Carvana (8%), and DoorDash (6%).
  • Don’t forget crypto: About 26,000 crypto sector employees were laid off in 2022.

Another big source of tech job cuts: Elon Musk. The billionaire halved Twitter’s staff when he took control of the company, laying off roughly 3,750 employees. And back in June, he announced a 10% reduction in salaried workers at Tesla.

Bottom line: When announcing these layoffs, several tech CEOs admitted to a similar mistake—they overhired during the pandemic, believing that Covid-era trends in sectors like e-commerce, gaming, and stock trading would persist beyond the public health emergency. They didn’t.