“Recession fears, rising interest rates, and a shift back toward a pre-pandemic lifestyle have bludgeoned the industry“
In March 2020, the tech industry was booming. Large and small tech companies both had a great need for more employees to high demand. Now in November of 2022, the U.S tech industry has laid off 120,000 tech jobs. While the United States is transitioning out of the pandemic, the actions made to adapt to the urgent need of moving life essentially online are becoming obsolete. While this is positive for other aspects of employment that suffered from the pandemic, tech companies are facing major setbacks currently. Here is where the largest hits are being taken.
Amazon: It’s no secret that Amazon carries the weight of online ordering and deliveries during the pandemic years. It was announced on Wednesday that the company is planning to cut around 10,000 employees this week. Dave Limp, senior vice president of devices and services at Amazon shared in a memo to employees on the company’s website on Wednesday morning, saying that these cuts will impact roles on the devices and services teams at Amazon. “ After a deep set of reviews, we recently decided to consolidate some teams and programs. One of these consequences of these decisions is that some roles will no longer be required” Limp addressed in the memo to employees.
Beth Galetti, senior vice president of People, Experience, and Technology for Amazon, shared a memo on November 3rd that let employees know they will cease hiring employees for the next few months and that actions will be made due to the “unusual macro- economic climate”. She ended by stating that “ We still intend to hire a meaningful number of people in 2023, and remain excited about our significant investments in our larger businesses, as well as new initiatives like Prime Video, Alexa, Grocery, Kuiper, Zoox, and Health Care”.
The impact has not only affected amazon employees directly, but other companies employed by Amazon to aid them in completing projects. An example could be drawn from Honeywell Intelligrated, a logistics company that works with Amazon to install automated systems in distribution facilities. An inside source from Honeywell Intelligrated tells that over 1,000 employees have been laid off in the departments of project management, engineering, and mechanical installation. While not all of these are due to Amazon set backs directly, the company is taking hard hits due to Amazon’s decline in production rates.
Line chart representing Amazons employment from 2008-2021 (chart brought by GeekWire)
Meta: Within the last year, the company that owns Facebook has made major changes to their development, one significant shift is changing their company name to meta to enhance the significant changes they are looking to make from a social media company, to a company that advances is connecting people through different technologies via the “metaverse”. And they plan to cut off 13%of their workforce, over 11,000 jobs.
Meta chief Mark Zuckerberg made a statement on November 9th that they would be freezing their hiring through March of 2023 in order to become “leaner and more efficient”. It’s been stated that this decision partially stems from the company not being able to compete with rivals such as TikTok, along with advertising companies widespread, tightening their budgets.
As meta is trying to rebrand their company into virtual creations, sacrifices appear to be inevitable to the company in order to reach their goal. Nonetheless, A hard hit for tech employees that have been hired within the last two years to guide society through the pandemic virtually.
Twitter: At the end of October, twitter was bought for 44 billion dollars, by Elon Musk. As the new era of twitter begins, serious changes have already been made. Below is the email Musk sent to his employees, it is reported this is the first official communication he had with his staff. Staff cuts were made by 50%. Twitter employees received an email first hand that jobs would be cut, and that they would receive an email the next morning titled “Your Role Twitter”, that would be sent to their personal email. Those who received an email through their company email were “in the clear”.
From: Elon Musk [email removed]
Date: Nov 9, 2022 [time stamp removed]
Sorry that this is my first email to the whole company but there is no way to sugarcoat the message.
Frankly, the economic picture ahead is dire especially for a company like ours that is so dependent on advertising in a challenging economic climate. Moreover, 70% of our advertising is brand, rather than specific performance, which makes us doubly vulnerable!
That is why the priority over the past ten days has been to develop and launch Twitter Blue Verified subscriptions (huge props to the team!).
Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn. We need roughly half of our revenue to be subscription.
Of course, we will still then be significantly reliant on advertising, so I am spending time with our sales & partnerships teams to ensure that Twitter continues to be appealing to advertisers.
This is the Spaces discussion that Robin, Yoel and I hosted today: [Link to Elon Q&A: Advertising & the Future removed]
The road ahead is arduous and will require intense work to succeed. We are also changing Twitter policy such that remote work is no longer allowed unless you have a specific exception. Managers will send the exception lists to me for review and approval.
Starting tomorrow (Thursday), everyone is required to be in the office for a minimum of 40 hours per week. Obviously, if you are physically unable to travel to an office or have a critical personal obligation, then your absence is understandable.
I look forward to working with you to take Twitter to a whole new level. The potential is truly incredible!
Full email from Musk to Twitter staff, transcribed by CNBC Nov 10th 2022
It is also known that Musk has been letting go of employees based on criticism towards Musk himself.
The plan moving forward for Twitter, in Musk’s hands, is to see how twitter can become more profitable. One change that has already been made is that it will cost 8$ a month to become verified by twitter and receive a blue check mark. More changes that are still in the work include charges for video content, as well as content moderation.
In this century, we have seen rapid changes in technology globally. The impossible is beginning to be imagined and plans are being made. At the same time, the idea of a recession is apparent, and tech companies are doing their best to prepare for this. Therefore, we are likely to see more decline in employment rates in the U.S tech industry.