Tech layoffs spiked in January 2023 as Google, Amazon, and other companies reduced employee headcount.
According to levels.fyi, which crowdsources layoff information, tech layoffs hit their highest level in 12 months. Here’s a chart:
Tech giants like Google have generally blamed the layoffs on the current economic uncertainty. The pandemic boosted revenues (and profits) for many companies selling cloud-based apps and services, leading to massive spending and hiring sprees; but with growing fears of a future recession, the executives running those companies are now cutting back on spending and reducing their respective headcounts.
Many of these cuts have been broad-based. For example, Amazon has reportedly cut workers from its robotics, physical stores, operations divisions, and even Amazon Web Services (AWS), its highly profitable cloud platform. In a statement, Amazon CEO Andy Jassy blamed the cuts on “labor shortages, supply chain difficulties, inflation, and productivity overhang from growing our fulfillment and transportation networks so substantially during the pandemic.”
Nor are the layoffs at the biggest companies necessarily over yet. According to the Command Line newsletter, Meta CEO Mark Zuckerberg recently told employees during an all-hands meeting: “I don’t think you want a management structure that’s just managers managing managers, managing managers, managing managers, managing the people who are doing the work.” That was widely interpreted as Zuckerberg preparing his staff for further cuts in addition to the 11,000 employees laid off in November 2022.
However, all of these companies (and many others) will continue to need highly specialized tech professionals to carry out their ambitious strategies for many years to come. Despite this current wave of cuts, companies must begin hiring again at some point—and with the tech unemployment rate hitting 1.8 percent in December (according to the latest analysis of U.S. Bureau of Labor Statistics (BLS) data by CompTIA), they might have to compete fiercely for that talent.