It has been a rough start to the year for the tech industry as 91 companies have laid off thousands of employees according to Layoffs.fyi. More are expected starting Wednesday as Amazon has said it will start its process of eliminating 18,000 positions.
In the first 16 days of this year, more than 24,000 employees have been laid off in the tech industry, according to the analysis from Layoffs.fyi. It is a startling number that adds to the 154,000 layoffs that plagued the industry last year.
“These are the exact areas where they’re laying off the most people. So, for Amazon, it’s devices,” said Daniel Keum, a professor of management at the Columbia Business School.
Keum says the layoffs are a correction to massive growth from the last few years.
During the pandemic, online work boomed, and many tech companies anticipated it as a new normal, but now, as we ease back into life before the pandemic, companies are laying off workers to bolster their balance sheets.
“[These companies] were overly optimistic in their ability to grow and the growth never materialized,” said Keum. “I mean Google, Amazon—their existing businesses had gotten so successful, so it’s sort of their past success constraining their future investment.”
That is what happened to Chris Graber’s brother just last month. Both he and his brother work in tech, but he says his brother was quickly able to find other work since his skills are still needed.
“Even though people are getting laid off, and even from our own recruiting where I’m at, we don’t see anyone kind of taking less,” said Graber. “People, even if they’re laid off and even if there’s a little bit of fear about the future, the employees in tech can still demand the work from home and other things they’re used to.”
Keum says the ability to quickly get hired elsewhere is because this is not a problem with tech at large. He says the layoffs are happening in certain sectors of certain companies, and many times, they are larger companies, so smaller tech firms are currently flooding the applicant pool looking for people who were recently laid off.
“You are still the most heavily sought-after talent in the world, across industries,” said Keum. “So, in the midterm, you might have to rethink your transition, but I think in two to three years, or four years, the hiring will continue. Google, Meta, Amazon, these companies will continue to grow and dominate the economy.”
This might not help those who have just been laid off, but it does show promise for the future.