Tech Layoffs Really Are Rising, and Here’s Why
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Note: This story originally published on Dec. 1, 2022 and included an interview with layoffs.fyi creator Roger Lee. It was updated on March 27 with new data and information on layoffs in the tech industry.
Layoffs are making headlines again, but they’re concentrated in just one sector: tech. And those numbers are spiking, with layoffs in January clocking in at more than seven times the amount in December, according to Layoffs.fyi, which tracks layoffs in the tech industry.
In fact, during 2022, more workers in tech were laid off than in 2020 and 2021 combined.
These layoffs are a peculiar outlier in an otherwise strong employment environment: The unemployment rate has hovered between 3.4% and 3.7% since April, bureau data shows. And quit rates — which reflect worker confidence — this year are consistently at some of the highest levels in more than 20 years, according to the Federal Reserve Bank of St. Louis.
Employment, at large, is doing well. But when layoffs are happening in the most visible sector on the internet, you’re going to hear about it.
What’s going on with layoffs in tech?
The biggest tech layoffs have occurred at high-profile companies. Here are some of the biggest layoffs in tech since 2022, beginning with the most recent:
On March 23, Accenture, an IT company, announced it would lay off 19,000 staff members — about 2.5% of its workforce — over the next 18 months.
On March 20, Amazon announced plans for another round of layoffs this time totaling about 9,000 employees — about 3% of its workforce. Amazon had previously laid off about 18,000 employees between November and January.
On March 14, Meta, which owns Facebook and Instagram, announced it would layoff 10,000 of its employees. Previously, on Nov. 9, Meta, laid off more than 11,000 employees — about 13% of its staff at the time.
On Feb. 8, Zoom Video Communications, Inc. announced it would lay off 15% of its staff or about 1,300 employees.
On Feb. 6, the computer company Dell announced it would lay off 5% of its staff or about 6,650 employees.
On Jan. 23, Spotify, one of the most popular audio streaming services, announced it would lay off 6% of its staff or about 600 employees.
On Jan. 20, Google-parent Alphabet announced it would be laying off 12,000 of its workers.
On Jan. 18, Microsoft, arguably the biggest name in computer software, announced that it would be laying off 10,000 members of its staff.
Twitter laid off about half of its staff soon after Elon Musk took the helm in late October 2022. Then on Nov. 16, Musk gave employees an ultimatum to commit to a new “hardcore” Twitter or take severance: More than 1,200 employees reportedly opted for the latter.
Countless big-name companies laid off employees and they run gamut of what tech has to offer: crypto (Coinbase), e-commerce (Shopify), ridesharing (Lyft), online payments (Stripe), work management platform (Asana) and an online real estate broker (Redfin). The list goes on and on.
But countless isn’t quite the right word — it’s 1,024 companies in 2022. As of March 27 it's 528 companies so far in 2023. That count is thanks to Roger Lee, creator of Layoffs.fyi, who has been following layoffs in tech since 2020 as startups started laying off employees during the early days of the pandemic.
The pandemic created an opportunity for people to increasingly turn to the Internet for work, shopping and socializing. In response, tech companies went on a hiring spree to meet consumer demand. This growth in tech employment started in late 2020 and lasted through 2021. At the same time the Federal Reserve’s policy slashed interest rates throughout 2021, which enabled tech companies to raise capital and invest in growth, Lee said.
But both trends reversed in early 2022.
The majority of layoffs at the beginning of 2022 came from startups, according to Lee. But in late 2022 and early 2023 it started to creep into bigger tech, as well. Lee also said that “Big Tech” layoffs like those seen at Meta and Twitter “present a unique opportunity to recruit a caliber of talent that would've previously been impossible to attract.”
Lee said he believes tech companies will slow down layoffs “when, and only when, it becomes clearer that the Fed is able to slow down inflation.”