What do trends in tech layoffs represent about the global economy? 2022

What do trends in tech layoffs represent about the global economy?  2022

Friday’s reports on the US economy showed 261,000 jobs were added in October, topping forecasts made of 200,000 jobs even as unemployment rose to 3.7 percent.

But, the increase in employment has created a false sense of security among citizens, and they should not be fooled by it. Job cuts and hiring freezes have started to engulf different sectors of the world. The layoffs have affected some of the world’s most prominent and valuable companies. That’s bad news for the economy.

But what is really happening? Tech companies have announced a massive number of layoffs at firms and have brought hiring processes to a standstill.

Amazon announced on Thursday that it has paused the hiring process for a while and has mentioned that the company will keep the hiring process on hold for several months, and that it will continue to monitor the situation of the macro economy to take into account the next set. This note was shared by Beh Galetti, Amazon’s senior vice president of people experience and technology, in a note to employees.

Last month, Amazon forecast that its revenue for the holiday quarter would be lower than expected, causing the stock to decline rapidly. Amazon shares are down 47 percent this year.

layoffs

In addition, Apple has declared a hiring freeze at the company in all areas except research and development. In a statement, Apple mentioned that it would continue with the hiring process shortly, but at this time, the company is not confirmed based on the current economic environment. They are taking a very deliberate approach in some parts of the business.

Apple is currently concerned about slower growth rates in the holiday season and declining customer spending followed by high interest rates.

Covid lockdowns in China have affected the production of iPhone 14. Apple shares are down 25 percent so far this year.

The Wallstreet Journal has reported that Meta plans to lay off employees on a large scale this week. The parent company of Facebook, Whatsapp and Instagram has laid off thousands of employees comprising 87000, and the announcement may be declared soon regarding the layoff.

On Thursday, Lyft Inc. said it would lay off 683 employees, or 13 percent of its workforce, in an effort to cut expenses in light of the failing economy.lyft 5 logo

The latest decision by the corporation is expected to result in a fourth-quarter charge of between $27 million and $32 million.

Previously, the corporation announced job cuts for 60 employees this year and slowed down the hiring process.
In addition, the company has ensured that the layoffs do not change the revenue forecast for the period that was previously published.

He anticipates between $1.04 billion and $1.06 billion in revenue and between $55 and $65 million in adjusted basic benefits.

One of Silicon Valley’s leading payment companies, Stripe, has laid off 14% of its entire workforce. The company’s CEO has stated that inflation, especially rising interest rates and insufficient start-up capital, has forced Stripe to cut costs.

Collison has also claimed that the company’s management problems were not related to the fact that it “over-hired” workers during the epidemic and had “too much confidence” in the short-term development of the e-commerce platform.
Stripe had more than 8,000 employees last month, but subsequent layoffs have reduced that number to less than 7,000, which is the same level of workforce that was anticipated in February 2022.

The hiring department is one of the departments in the company that has experienced more widespread layoffs than others.

Stripe provides the financial equivalent of six months of current health premiums, as well as fourteen weeks of severance pay and a full year bonus.stripe 1

Former workers say Stripe planned the layoffs from the start and originally focused on underperforming workers. However, due to the deteriorating economic climate, the layoffs would target employee performance as well as the companies’ operations and job responsibilities.

More potential supply chain issues can result in increased layoffs:

The threat of the US rail strike can severely disrupt supply chains. US Labor Secretary Maty Walsh said if the strike continues, it may be bad news for companies that rely on supply chains. If any rail union went on strike, all rail unions, comprising more than 110,000 members, would join the bandwagon and honor their picket line by refusing to work.

download 3

This would spell bad news for supply chains, as 30 percent of US production is transported by rail. The stoppage of the trains, in turn, would translate into rising prices for gasoline and food. In addition, factories would be forced to close due to parts shortages and there will be more layoffs as companies cannot afford to pay.

Walsh was previously in a 16-hour bargaining agreement with the workers and mentioned that Congress had framed a contract to keep union members on the job.

Edited by Prakriti Arora

Leave a Comment