If you’ve spent any time on social media or in the news, you’ve likely seen stories about big tech layoffs. Whether they’re for cost-cutting or a sign of trouble in the market, these events make headlines and raise concerns about job security for those left behind.
Tech layoffs are occurring across the industry, from small startups to large multinational corporations. Some are even affecting people who work in non-cyclical industries, such as financial services, healthcare, and defense. While layoffs are never good, they do play an important role in companies’ ability to adapt and adjust to changing economic conditions.
The most obvious reason for layoffs is that rising inflation and interest rates are making it harder to cover costs. This makes it more expensive to hire and run a business, which is why many companies are cutting staff to reduce overhead. Additionally, a downturn means less spending from consumers and businesses, which can lead to lower sales and revenue. This can affect tech companies that rely on advertising, such as Meta, Google, Instagram, and Snap, or have a business model based on selling cloud-based solutions, such as Oracle’s recent acquisition of Cerner.
For those who remain, companies are redeploying employees and restructuring their business operations to prepare for a potential recession. This may mean reassigning roles, refocusing priorities, or increasing reliance on contract talent. It can also be an opportunity for some companies to build a more resilient tech team by tapping into the larger talent pool created by layoffs.