The wave of layoffs in tech companies spread to other sectors
Firms from the finance, real estate, media, telecom, automotive and chemistry sectors are added to the list of big technology companies and Wall Street titans that have announced the layoffs in order to reduce their costs.
Due to recession concerns and high inflation, layoffs are becoming a global problem.
While the recession in the global economy, which started with the coronavirus epidemic, has not lost its effect yet, concerns about inflation, rising interest rates, high energy prices and geopolitical problems are causing fluctuations in the production of companies and in the markets.
Technology companies, which increased their business purchases due to the rise in e-commerce expenditures with the epidemic, are faced with high inflation and increasing interest rates with the rapid economic recovery after the epidemic.
While some companies struggled to find enough employees to meet the surge in demand for their products at the beginning of the coronavirus outbreak, today unusually high inflation is eroding consumers' ability to keep spending. This leads to a decrease in the sales of the companies.
Rapid increases in interest rates, coupled with weak consumer demand, are forcing companies like Amazon, Meta and Google, as well as major investment banks to cut their workforces.
In addition, with the use of new technologies, especially artificial intelligence, in many jobs, the need for some positions is eliminated, and this causes companies to reduce the number of employees.
In an environment of global economic uncertainty, companies are forced to take steps to reduce their costs while struggling with the decline in their profits and dwindling cash reserves.
While the escalating energy crisis with the Russia-Ukraine war slows down the global economy, many companies, especially in the USA, Europe and Asia, continue to announce that they will take a break from new hires or reduce the number of employees.
TECHNOLOGY COMPANIES CONTINUE TO LAY OFF
Amazon, Meta and Twitter laid off several thousand employees last year, while other tech companies are also trying to cut jobs.
According to a report released this month by Challenger, Gray & Christmas, a consulting firm that keeps track of layoffs announced or confirmed by companies in the telecom, electronics and software development fields, US layoff announcements rose 129 percent in December last year from a year ago. It's close to 44,000.
Last year, layoff announcements totaled approximately 364,000, a 13 percent increase over 2021.
While most of the dismissal announcements came from technology companies, it was announced that more than 97 thousand people from companies in this sector would be laid off in 2022, an increase of 649 percent compared to the previous year.
The automotive industry was the second sector to report the most layoffs, with 30,912 people last year. Health sector companies, on the other hand, announced the dismissal of 30,626 people in the same period.
LAUNCH PLAN ANNOUNCED FOR APPROXIMATELY 70,000 PEOPLE
While new layoffs were rapidly added to the wave of layoffs this year, more than 67 thousand workforce reductions were reported by technology companies in 2023 alone, according to data from the Layoffs.fyi website, which tracks layoffs in the technology sector.
Announcing that it will lay off 10 thousand people last year, Amazon announced that it plans to lay off more than 18,000 people, including the one they announced earlier this year.
Amazon announced that the majority of layoffs will occur in stores and people, experience and technology (PXT) groups.
American cloud-based software company Salesforce announced that it has decided to reduce its workforce by 10 percent. While this rate corresponds to approximately 8 thousand people, it was noted that the layoffs are expected to reduce the company's costs by 1.4 - 2.1 billion dollars.
Cryptocurrency exchange Coinbase reported that it plans to lay off 950 more.
Crypto.com said it will cut its workforce by 20 percent due to continued "headwinds" and unpredictable global economic conditions.
Microsoft, one of the US technology companies, also announced its plan to lay off 10 thousand people, equivalent to about 5 percent of its employees, by the end of the third quarter of the year.
GOOGLE, SPOTIFY AND SAP ALSO REDUCE THE LABOR
WeWork, a startup that provides companies with co-working space, including physical and virtual spaces, has announced plans to lay off 300 of its employees.
Alphabet, the parent company of US technology giant Google, announced that it will lay off 12,000 employees.
Swedish-based music streaming and podcast service Spotify has decided to reorganize the company's organization in order to achieve greater efficiency, manage costs and accelerate decision-making. In this context, the company announced that it will lay off 6 percent of its employees.
The wave of layoffs hit investment banking after the impending recession with rising interest rates and revenues plummeted.
Morgan Stanley and Barclays either quietly laid off their employees or announced plans to do so in the coming months.
Swiss investment bank Credit Suisse announced last year that it will cut 9,000 jobs worldwide by 2025.
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