What’s happening in the technology sector? Layoffs are skyrocketing

The global economic slowdown is hitting technology companies hard. The Nasdaq-100, the benchmark of the powerful American technology sector, has lost more than a quarter of its total market capitalization so far this year.

These declines were influenced by the lower appetite of investors in the speculative sectors and the end of the digitalization boom experienced with the pandemic. In addition, many technology companies have seen their trading margins reduced by inflation, rising labor costs and recent interest rate hikeswhich makes its financing more expensive.

In an attempt to overcome this scenario, and in view of a possible global economic downturn, a large portion of technology companies they started cutting staff.

In this regard, a recent article in Bloomberg has compiled some of the companies that have stopped hiring and started laying off, after years of growth in the industry. The leaders of the technological giants are thus following in the footsteps of the large international investors who, as reported Free marketthey are already prepared for the next recession.

In this direction, Alphabetthe parent company of Google, has indicated that it will slow the pace of hiring in the coming months by “not to be sheltered from economic headwinds”. Microsoft it is also eliminating job vacancies and reorganizing its workforce, although this process has been limited to laying off 1% of workers.

For its part, Meta (Facebook) anticipates a looming recession and cut engineering hiring by 30%, a policy Apple is also enforcing in view of a possible contraction. In addition, Amazon it said in April it had to cut staff after big hires made during the pandemic.

Elon Musk, for his part, reported that about 10% of the 100,000 workers at You’re here could be fired because of a bad feeling” on the economy. Whereas, Twitterhit by the uncertainty surrounding the takeover by Elon Musk himself, began canceling job offers in May.

As we can see, the degree of adjustment of the technological giants is not very exaggerated thanks to their strong market position. But taking into account the layoffs made by the tech sector as a whole, which includes many less solid companies, The data shows a disturbing picture.

Thus, if we look at the statistics compiled by the portal trueup.iofollowing layoffs at startups and tech companies, there would have been more 68,000 layoffs since May. As can be seen in the following chart, some of the most relevant layoffs were those from the company delivery Getir, those of Tesla, as well as those corresponding to the distributor of vehicles Carvana, those of Microsoft or those of the swap Coinbase cryptocurrencies, among others.

Evolution of tech layoffs according to Trueup.io

On the other hand, the platform Layoffs.fyi lowers the number of layoffs to 43,000 since May of this year. In any case, the two sources agree on the sharp increase in layoffs from February 2022, and much more aggressively since May. This is therefore the biggest rebound since the outbreak of the pandemic in 2020. At the time, the layoffs focused on startups dedicated to transport, travel or retail, whereas today they are s extend to many other branches.

Evolution of tech layoffs according to Layoffs.fyi

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