Less than three weeks into the new year, the effects of inflation are plaguing the economy with layoffs that started in 2022 continuing to snowball across several industries. Tech leads the pack.
More than 154,000 tech workers were laid off in 2022 — mostly in November, according to Layoffs.fyi, a crowdsourced database that has tracked tech layoffs since the pandemic.
While tech companies bore the brunt, mass layoffs also devastated workers at many startups, online platforms, banks and manufacturers.
Workers most likely to worry about job cuts include professionals in product management, quality assurance, marketing, finance and information technology, Business News Daily reported.
The least worried are those categorized as problem-solvers in fields such as accounting, military and protective services, community and social services, administration and legal, according to the LinkedIn Workforce Confidence Index.
Vanishing opportunities in the tech industry may create more challenges for Black workers than white, according to EBN (Employee Benefit News), a publication for human resource professionals.
Black workers account for 7.4 percent of the tech workforce, according to a 2021 report from tech-focused nonprofit AnitaB.org.
“Historically, the unemployment rate for people with tech skills is significantly lower than the unemployment overall — but the Black unemployment rate is typically twice that of white people,” said Michael Collins, vice president of Jobs for the Future, a nonprofit that supports equitable economic advancement.
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Nela Richardson, chief economist at ADP Research Institute, reminded viewers on CNN Business that tech is a very small percentage of the overall labor market — just 2 percent.
“Tech is not a bellwether for the real economy, or for the labor market,” Richardson said.
The unemployment rate of 3.5 percent in the U.S. is at a five-decade low, according to the Department of Labor.
These are some of the companies with the biggest layoffs so far in 2023.
The world’s largest online retailer plans to begin a fresh round of layoffs on Jan. 18 of 18,000 employees in its biggest workforce cut in its 28-year history, CBBC reported. The cuts will happen mainly in its human resources divisions and stores, CNBC reported.
In November, Amazon announced that layoffs would total 10,000 employees, making this a larger number than previously announced. Amazon also has the largest number of jobs cut at a tech company since the industry began downsizing in 2022, NPR reported.
The layoffs follow Amazon’s hiring spree during the covid-19 pandemic when it increased its global workforce from 798,000 in the fourth quarter of 2019 to more than 1.6 million by the end of 2021.
Amazon had 1.544 million workers before layoffs began.
Microsoft said on Jan. 18 in a securities filing that plans to lay off 10,000 employees as part of its cost-cutting measures, making it the latest tech company to reduce staff because of growing economic uncertainty.
Speaking at the World Economic Forum (WEF) in Davos, Switzerland, Microsoft CEO Satya Nadella said the company was not immune to a weaker global economy.
“No one can defy gravity and gravity here is inflation-adjusted economic growth,” he told WEF founder Klaus Schwab in a livestreamed discussion.
Nadella cited looming recession fears and also cited changing demand in a memo to staffers Wednesday.
“As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” he told employees.
Microsoft had 221,000 full-time employees globally and the layoffs represent less than 5 percent of the workforce.
Cloud-based software company Salesforce announced on Jan. 4 that around 8,000 staff would be laid off — about 10 percent of its total workforce. Like many other companies, Salesforce admitted that it hired too quickly during the pandemic and was now correcting.
“I take responsibility for that,” CEO Marc Benioff said. Benioff said remote workers could be responsible for the company’s reduced productivity, according to a leaked audio of an internal meeting, Business Insider repported. He said 96 percent of the company’s annual contract value (ACV) was being delivered by 50 percent of sales account executives.
“We don’t have the same level of performance and productivity that we had in 2020 before the pandemic,” Benioff said. “When we look at some percentage of the employees, especially some of the folks that are new employees, are just not as productive.”
The number of U.S. employees working remotely most of the time tripled to nearly 28 million from 2019 to 2021, according to recent government data.
Crypto is one of the tech industries hit hardest in the past year due in part to scandals, theft, fraud, and bad management. The combination of inflated crypto prices, economic uncertainty, and the FTX collapse cost crypto investors and firms billions of dollars.
Coinbase, one of the more established crypto exchanges in the industry, announced on Jan. 10 that 950 workers would be laid off representing 20 percent of the company’s remaining workforce.
This was the second Coinbase layoff in seven months. The first one happened in June 2022, when Coinbase cut 1,100 jobs.
“In 2022, the crypto market trended downwards along with the broader macroeconomy,” Coinbase CEO Brian Armstrong said. “We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion.”
Coinbase went public in 2021 and expanded fast during the pandemic.
As many as 3,200 Goldman Sachs employees or 6.5 percent of the Big 4 investment bank’s total 49,100 employees could be laid off as of the first two weeks of January 2023.
Goldman Sachs employee numbers grew in 2021 and 2022 along with a boom in deals and trading activity, but then the bottom fell out. IPO issuance fell 94 percent in 2022, according to data from the Securities Industry and Financial Markets Association (SIFMA).
The company is concerned that the economy will get worse this year, and Goldman is laying off in case stock and bond issuance and mergers don’t rebound, CNBC reported.
“If things haven’t gotten better in the first quarter, we’ll have more changes,” said compensation consultant Alan Johnson. “You can’t have these expensive people sitting around with nothing to do.”