Less than 3% of all jobs in America are in the technology sector. Let’s visualize the tech company layoffs so far in 2022.
Even a separate website that tracks all IT layoffs in the US exists.
For the creation of this infographic, Nick Routley of Visual Capitalist utilized statistics from trueup.io, which offers information on a variety of domestic and foreign tech firms that have fired employees as of 2022.
A Thousand Cuts: Mass Layoffs by Tech Companies
Globally, layoffs are a phenomena that is affecting the whole tech sector. The following are a some of the more well-known instances of mass layoffs in 2022:
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- Meta: The social media juggernaut faces stiff competition from upstarts like TikTok as well as a declining ad budgets due to the weakening economy. Although Meta finds this decrease in staff to be distressing, it is important to take a bigger picture into account. These will be the first significant job reductions the company has made in nearly two decades of operation.
- Twitter: Although Meta dominates in terms of sheer number of layoffs, Twitter’s mass layoffs are undeniably the most dramatic. Elon Musk, the company’s outspoken new owner, dismissed 50% of its personnel in early November, and thousands of contractors were laid off shortly after. Assessing how many employees are still employed by the company will be difficult until the dust settles.
- Byju’s: Layoffs are not exclusive to the United States. Cuts are also being made in India’s huge IT sector. Byju’s, an EdTech behemoth, laid off 2,500 people in October, accounting for roughly 5% of its overall workforce.
- Peloton: Throughout the year, the high-end workout equipment manufacturer has reduced its workforce. Companies like Meta stick up in the above graphic because they laid off thousands of people all at once. Peloton, on the other hand, laid off employees in phases throughout the year. After experiencing rapid expansion during the pandemic, the corporation is slimming down in order to reclaim profitability.
Why are Tech Companies Laying Off so Many People?
The claimed causes for the large number of layoffs include economic instability (external factors) and poor performance (internal factors).
Goldman Sachs Research points out that “higher interest rates and tighter financial conditions disproportionately impact the sector because tech company profits are typically expected further out in the future and therefore subject to greater duration risk.”
Reduced ad revenue and the collapse of the cryptocurrency market may also have affected the decision to reduce headcount. Twitter and Snapchat are examples of the former, while Coinbase and Kraken are examples of the latter.
What Do These Job Cuts Mean for the Economy?
At first glance, widespread layoffs in the technology sector may appear to be a negative portent for the broader economy, especially considering the outsized effect tech businesses have on markets.
This, fortunately, does not seem to be the case. The government’s payroll and wage numbers have outperformed expectations, and the country’s unemployment rate is near a half-century low.
So, what is the dilemma?
First of all, less than 3% of all jobs in America are in the technology sector. Also, there is a good chance that unemployed IT workers will quickly find a new position.
Whether November will mark the pinnacle of employment shedding is still to be determined. Employers typically make an effort to avoid terminating employees just before the holiday season. Trueup.io has tracked 7,600 additional layoffs so far in December.