The tech industry, one of the fastest growing sectors during the global pandemic, is now facing massive layoffs as many tech companies downsize their workforce in attempts to curb costs ahead of the potential economic recession and inflation. 

According to Layoffs.fyi, a site that tracks job cuts in the sector, nearly 200,000 employees have been laid off from their jobs since the start of this year. In particular, tech giants such as Alphabet, Amazon, Meta and Microsoft have laid off over 50,000 employees, with Microsoft announcing 10,000 job cuts. 

“We’re living through times of significant change, and as I meet with customers and partners, a few things are clear,” Microsoft CEO Satya Nadella said. 

“First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less.” 

Check out: Microsoft lays off 10,000 employees 

Likewise, Amazon has laid off over 1.2 per cent of their 1.54 million workforce in the month of January alone. 

In a Forbes article, Wedbush analyst Daniel Ives said that layoffs in the tech sector will be a “major theme” throughout the financial year as Silicon Valley prepares for a potential recession after a decade of rapid growth that has pushed many tech firms to overspend. 

Tech executives were apologetic in regard to the massive layoffs, pointing to economic factors as a reason for their decision. However, they also have admitted that they over-hired during the pandemic due to the rapid acceleration of digital services. 

“As part of our annual planning process for 2023, leaders across the company have been working with their teams and looking at their workforce levels, investments they want to make in the future, and prioritising what matters most to customers and the long-term health of our businesses,” Amazon CEO Andy Jassy said. 

“This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years.” 

Check out: New report says skilled migration needs a reset 

The recent massive layoffs are particularly troubling for the tech industry as it has been a source of job growth and innovation in recent years. Many of the jobs that employees were laid off from were in areas such as artificial intelligence, cloud computing, and cybersecurity, all of which were expected to be in high demand for the foreseeable future. 

Despite the layoffs, many tech companies are continuing to invest in new technology and research, such as Microsoft continuing to invest capital and talent in strategic innovation areas like AI and a service offering OpenAI’s ChatGPT. 

Eliza Sayon

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Eliza is a content producer and editor at Public Spectrum. She is an experienced writer on topics related to the government and to the public, as well as stories that uplift and improve the community.

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