Job Losses in Tech Industry Reach Alarming Levels

Job Losses in Tech Industry Reach Alarming Levels

The COVID-19 pandemic and subsequent lockdowns have caused a seismic shift in the job market, with many sectors experiencing unprecedented changes. The tech industry was not spared from this shift, as it saw a massive wave of layoffs throughout 2022 that shows no signs of slowing down in 2023.

According to, a platform that tracks layoffs in the tech sector, over 120,000 tech employees have already lost their jobs as of February 27, 2023. This number is alarming considering it’s already three-fourths of the total number of employees laid off in 2022, which was 159,000.

The accelerated pace of layoffs shows no signs of slowing down in the short term, according to founder Roger Lee. He attributes this trend to the excessive hiring that occurred during the pandemic. Starting in mid-2020, the tech sector went on a hiring spree, fueled by low interest rates and high demand for tech products like cybersecurity and cloud computing.

The lockdowns also led to a rapid rise in e-commerce as people shifted their discretionary spending to buying products from tech companies. Companies like Amazon assumed that consumers would continue to use e-commerce at an accelerating pace even after the pandemic ended, leading to more hiring.

However, once the pandemic was under control, consumers reverted to their pre-pandemic spending pattern, and companies began to review their costs and pare back on business units that were unprofitable. As a result, tech companies are now performing layoffs to undo the overhiring that occurred over the past couple of years.

Chief executives at technology companies presented various reasons to employees for tech layoffs, but overhiring was a common theme. Mark Benioff, CEO of Salesforce, said they hired too many people as revenue accelerated through the pandemic, leading into the economic downturn they’re now facing. Sundar Pichai, CEO of Google, said they hired for a different economic reality than the one they face today.

Layoffs have not been limited to the tech sector, as other sectors have also experienced significant cutbacks. The entertainment giant Disney is cutting 7,700 jobs, while automaker Ford is planning to ax 3,800 jobs in Europe. Chemical developer Dow is laying off 2,000, and 3M is eliminating 2,500 manufacturing jobs globally.

Looking ahead, the recent wave of tech layoffs has tracked closely with the rise in interest rates over the past year. If and when interest rates stabilize or even decline, which is projected to happen sometime this year, Lee believes we’ll see layoffs start to subside as well.

In conclusion, the tech industry is experiencing a significant shift due to the pandemic, resulting in a wave of layoffs. Companies are now performing layoffs to undo the excessive hiring that occurred during the pandemic, which has caused a significant disruption in the job market. As interest rates stabilize or decline, we may see layoffs start to subside in the coming months.