The tech industry has long been hailed as a savior for job seekers, providing employment opportunities for people of all educational backgrounds. However, even this blooming industry is not immune to recession, as the tech layoffs 2022 have become a major concern for tech employees worldwide.
According to data tracking sources, global tech companies have been laying off their employees at the fastest rate ever recorded since the COVID-19 pandemic began in 2020. This news has come as a shock to many, as the tech industry had previously been seen as a secure and stable field. In the United States alone, more than 91,000 tech sector workers were laid off in mass job cuts so far in 2022, according to a Crunchbase News tally. Additionally, Layoffs.fyi reports that global employers have cut more than 150,000 jobs.
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The number of tech layoffs 2022, as reported in the media, is significantly higher than the number of layoffs in 2020 (80,000 from March to December) and ten times the number of layoffs in 2021 (15,000).
According to data compiled on Layoffs.fyi, internet entrepreneur Roger Lee created a website to “create awareness around all of these tech layoffs” and help laid-off employees find new employment, tech companies such as Meta Platforms, Amazon, and Netflix are among those leading the layoff trend. Meta Platforms, the parent company of Facebook, announced more than 11,000 job cuts in November, and Amazon may cut over 10,000 employees. The data also includes small companies and startups, although it should be noted that it does not reflect the exact number of tech layoffs 2022.
The tech industry experienced a J-shaped growth curve during the lockdown phase as global businesses turned to tech solutions to continue operating. As the COVID-19 pandemic receded and lockdowns were lifted, many companies returned to offline modes of operation, leading to a slowdown in demand for tech solutions. This caused tech businesses to reduce their workforce through layoffs, hiring freezes, and cost-cutting measures.
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The increased demand for tech solutions during the pandemic has led these companies to hire more employees than they actually needed. Some CEOs have apologized for expanding their payrolls too quickly. The slowdown in spending on tech products and the dimming outlook for digital advertising have further contributed to the current state of the tech industry.
The public markets also suffered greatly in 2022 due to inflation concerns, rising interest rates, and geopolitical issues, which have resulted in a volatile stock market. These events have also impacted the private markets, including startups that saw a boost during the pandemic but are now facing a cooling-off period. Startups report that it is becoming more challenging to secure new funding as valuations, particularly at the late stage, have declined.
