2022 Tech Layoffs: What Does The Wave Of Layoffs Mean For The Economy

Many had predicted that the boom for digital services during the pandemic would be effectively long-lasting. However, with the present circumstances at play, one could not have been wrong enough. With many people predicting that this would be a permanent acceleration, the current slowdown and structural shift in consumer preference have come as a disappointing realisation.

It can be stated that not only has online commerce returned to its prior trends, but additional macroeconomic downturns, advertising losses, and increased competition have forced the massive tech giants to their knees.  

This adverse in-cognancy in the expectation and reality has led to the concoction of a tale of misery which is sadder for the employees being laid off on the daily basis. November is the month that can be considered as the one where Big Techs got significantly smaller. 

Such shrinkage has been acutely felt by Twitter, which led by its new owner, has tried to layoff off a humongous workforce at play. However, saddening is the state of affairs at Twitter, it is far from being alone in this spree of laying off workers and adversely stripping their employees of their health plans and salaries. Stripe was recently seen cutting 14% of its workforce even though only recently it was seen as the gold standard of rising deca-unicorns. 

In addition to the aforementioned firms, Meta, Facebook, Lyft, Amazon, etc. have announced huge layoffs. If the number of newly out-of-work techies is to be scrutinised, the recent purge can be estimated to be six figures. However, it is worth noting here that such numbers don’t tell the full comprehensive story.

It is no news that the most valuable asset of any firm is talent which needs to be utilised and nurtured to bring about efficiency in the workings of the organisation. This comprehensive mantra of talent acquisition and retention extends also to the tiniest garage-based startup, left alone big industries and firms. 

Thus, with tech layoffs on the rise, the probability of employees with limited or used capabilities has been on the line. Given that employees of the company are the variable factors of production, thus cutting down the same has been the most evident game plan for employers in the market. 

In addition to the microeconomic analysis, the macroeconomic factors have played a key role in the current state of events. As dark clouds gather on the economic horizon around the world, companies have been witnessed willingly trying to write off the investment in talent acquisition.

Long-Term Fiasco Of Tech Giants: Tread With Caution

Even though, the talent is being kicked out, will such massive tech layoffs be beneficial in the long run? Sadly, the situation might be distressing in the future. Even though the economic trends fluctuate between boom and bust, technology is witnessed going in only one direction. 

Thus, when the economic downturn is over, and the business cycle mandala turns, the companies which are most willingly bidding farewell to their talent will find themselves playing catchup. There will be trends of spending millions of dollars to restaff their workforce, which ultimately will be incurred at a cost.  

During this time, it will be crucial to analyse that employees’ loyalties will be altered. These tech giants will find themselves in a spate of new competition which will be challenging. The disgruntled employees will be seen seeking comfort in startups that are way more flexible and accommodating compared to the tech giants in the industry.

History bears testimony to the fact that Silicon Valley has seen many iconic companies get their start in many down-market times. Google has been the prime example of the same which was launched in 1998. 

This materialled due to eccentric job market scenarios in the past and history might replay itself in the current situation of woes. The only discrepancy between those endings and new starting is the fact that the current layoffs add a new volume to that legacy. If talent layoff cashes on its potential, the economy might see some new ventures cropping up in the future which will prove to be valuable to the economy. 

Thus, even though the times are hard at the moment, the tech layoffs and the questionable strategy of the tech giants and firms might lead to a start of a new era.