According to a recent report, it revealed that layoffs of tech workers in the opening two months of 2023 have surpassed the number of tech layoffs for the whole of last year.
Statistics reveal that in 2023, over 108,000 tech workers have been laid off so far, which represents 67.2% of the total amount of tech layoffs recorded in the whole of last year, which is about 160,997.
The string of incessant layoffs ravaging the global tech industry is attributed mainly to uncertain economic conditions. These layoffs are occurring in a period of slowing growth, higher interest rates to battle inflation, and fears of a possible recession next year.
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In recent months, hundreds of thousands of tech workers have lost jobs at tech companies such as Twitter, Tesla, Snapchat, Amazon, Spotify, Microsoft, Google, Meta, etc, and other giant companies in recent months. While high-profile tech companies have already announced significant job cuts this year, the silver lining for technology pros is that many of the layoffs involve non-technical staff.
Currently, a lack of experienced tech talent means companies have been raising salaries for IT professionals, as analysts predict that raises for IT pros could jump 8% in 2023.
It is interesting to note that more than 102,000 workers in U.S.-based tech companies (or tech companies with a large U.S. workforce) have been laid off in mass job cuts so far in 2023, which has seen the Unemployment claims across the U.S. economy at an eight-year high.
The job cuts in tech land are piling up, as companies that led the 10-year bull market are beginning to adapt to a new reality. Analysts reveal that the job cuts are a form of belt-tightening for companies that hired aggressively in the wake of the covid-19 pandemic.
The theory behind these ongoing layoffs is that it saves the cuts to the company’s cost, even though there’s an initial expenditure of millions or billions of dollars in severance. The idea is, with fewer salaries, the company’s costs are lower on an ongoing basis, which will enable them to stay afloat.
The massive layoffs in most tech companies are occurring because these companies went on a hiring spree during the pandemic when lockdowns sparked a tech buying spree to support remote work and an uptick in e-commerce, and now they face revenue declines, which has left them with no option than to trim the workforce.
In the five years leading up to the pandemic, the tech industry added 1.3 million workers, according to an analysis of Bureau of Labor Statistics data by CompTIA. While employment trends for 2023 continue to change and evolve and many companies have experienced mass layoffs, economists say that this won’t necessarily be the norm moving forward.