The COVID-19 pandemic upended just about everything. It destroyed businesses, ravaged government finances and brought sorrow to millions. On the other hand, the turmoil was a boon for the tech sector, as the unprecedented lockdowns, shifts in consumer and worker behaviour, and easy access to cheap credit prompted the world’s tech giants to double their headcounts to keep up with demand.
Those heady days are gone, as the barrage of recent layoff-related headlines makes clear. Since November, tech companies have laid off a collective 126,000 workers, with 60,000 of those job cuts coming in January alone, according to Layoffs.fyi, a site tracking the worldwide industry carnage.
The numbers are certainly eye-popping. In one fell swoop, Amazon announced in early January that it would slash 18,000 jobs, citing “rapid” hiring in the past few years and economic uncertainty ahead. “Companies that last a long time go through different phases,” CEO Andy Jassy told employees in a blog post. “They’re not in heavy people-expansion mode every year.” Meanwhile, Mark Zuckerberg’s November announcement to employees at Meta that 11,000 of them had to go came with a mea culpa about misreading the surge in e-commerce growth. “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended,” he wrote. “I did, too.”
While these are some of the largest layoffs the tech sector has ever seen, they’re far from the largest mass culls in corporate history. Indeed, of the 10 largest individual layoff announcements over the past three decades, as compiled by outplacement firm Challenger, Gray & Christmas, the smallest round of cuts—that being Boeing’s decision to axe 31,000 jobs in the wake of the Sept. 11 terrorist attack—was still twice as large as most of the high-profile cuts of the past few months. And they pale in comparison to the bloodbaths at IBM and AT&T in the 1990s (which earned their CEOs a spot on the cover of Newsweek under the headline “Corporate killers”) or what Citigroup, GM and Circuit City employees endured during the Great Recession.
The recent layoffs are also considerably smaller in terms of percentage of workers cut loose. Jassy may have wielded the largest hatchet in recent months, but it looks like a scalpel when you consider Amazon employed more than 1.6 million people last year. That means the cuts amount to just over 1% of workers, compared to one-fifth of IBM’s back in ‘93. (Fun note: Even after the layoffs, Amazon employs one out of every 149 workers in the U.S.)
More big tech cuts may be in the offing, but for now the headline-grabbing layoffs seem less about an industry in abject crisis than one moderating after a bout of extreme exuberance.
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