Saturday, 3 June 2023

Silicon Valley layoff Fever, will it spread to the entire ‎economy?!‎

The job cuts of last year have continued into 2023, with layoffs once again stripping tens of thousands of tech workers from their jobs; This time around, the workforce cuts were driven by the biggest names in technology such as tech giant Google, e-commerce company Amazon, software company Microsoft, Yahoo and Zoom. Startups have also announced cuts across all sectors, from coding to software and services. Most companies attributed the move to the macroeconomic environment and the need to achieve profitability

Comprehensive layoff:

According to the American newspaper “TechCrunch” interested in technology and startups, about 25 American companies announced during this March the reduction of their jobs, the most prominent of these companies, Lucid Motors, Walt Disney, Sales Force, Amazon, Microsoft, Meta, and Imo.

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While about 18 companies reduced their employment last February, the most prominent of which were Twitter, Yahoo, Zoom, Dell, and Rivian.

Corrective trend:

Reports indicate that the wave of mass layoffs that organize American companies, especially in the field of technology, indicates that it is a corrective trend, following the epidemic period, which created more jobs than is currently required, according to observers.

With tens of thousands of workers suddenly losing their jobs at the likes of Google, Amazon, IBM, Salesforce and more, the shocks are understandably reverberating throughout the labor market. Speaking to CNBC earlier, Julia Pollack, chief economist at ZipRecruiter, said the tech “layoffs” have a disproportionate chilling effect, because they happen in prominent companies, which has just experienced rapid growth. Moreover, there is a slowdown causing job seekers more broadly to worry that jobs are becoming less available.

While these job losses are surprising and undoubtedly disturbing to the people affected by them, analysts believe that they are not an indication of a recession.

Possible repercussions:

Big tech has already laid off more than 150,000 workers in 2023. In some ways, it’s the same old story. These companies don’t just fire people — they don’t use HR-friendly ways to do it. Bottom line: The way technology companies conduct layoffs may hurt business in the long run, experts told Yahoo Finance.

According to the German DW website, analysts were divided over the possibility of a wave of layoffs spreading from the technology sector to the rest of the US economy? Whether the US economy is heading towards recession and high unemployment? For her part, Karen Dinan of the Peterson Institute for International Economics says that layoffs have received a lot of attention; however, their direct impact on public employment in the United States is limited.

And while some tech companies have cut jobs, many others are still hiring aggressively thanks to an inflamed job market that has left employers in many sectors struggling to fill vacancies.

A job site survey by TrueUp last month revealed more than 179,000 job vacancies at big tech companies, startups and so-called unicorns — new privately held companies worth at least $1 billion, a ZipRecruit survey found. Four out of five American technology workers who have been fired have found a new job within three months.

Eight out of the top 10 jobs in the US are still technical — including developers, engineers, and machine learning jobs — as ranked by, giving tech applicants the best job prospects in any industry in 2023.

External influence:

According to DW, many of the reported job losses also affect employees outside the United States

At a time when analysts say that despite all the recent layoffs, most tech companies are still much bigger than they were before the pandemic. Despite announcing 12,000 job losses last week, Alphabet Inc., the owner of Google, has hired more than 100,000 employees since 2018.

Meanwhile, Amazon’s decision to fire 18,000 people is just a fraction of its global workforce of 1.5 million. The only exception might be Twitter, which cut about half of the social media platform’s 7,500 employees after it was acquired by US billionaire Tesla CEO Elon Musk, and the cut has sparked mixed feelings. However, Musk believes that job cuts were necessary for the future of the platform, which is still recording losses, according to the report.

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