Layoffs done by big Tech Companies in last few months shock tech employees and students but why technology companies like google, amazon, microsoft fired employees.
Sundar Pichai pointed towards this in the letter he sent to employees after announcing termination of 12,000 people. He said, “Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”
Layoffs Main Reasons
Top companies layoffs due to many reasons, here are some of the.
Recession In Economy
A recession begins when the economy reaches a peak of activity and ends when the economy reaches on its weak conditions. Recession was main reason behind huge layoffs.
How recession influence big companies to do layoff ? Due to covid pandemic IT sector was in demand because everyone shift in digital mode and now condition is normal but demand is low and also due to high interest rates company fired employees hired during covid pandemic demands.
Pressure from Investors
Fund managers and investors in big tech companies like Google, Meta, Amazon, Twitter, etc. are pushing company management to make quick decisions to counter the slowdown in growth in the companies.
Investor get negative returns on their investments so they force company’s management to fired employees. From last one and half years investors get negative 20-35 percent returns.
Bottom Line was in Trouble
Due to less demand and high interest rate economic activities slow down and because of slow down companies bottom line is falling or negatives.
Bottom line means net profit due to falling net profits and high employees salary company need to fired them for cost reductions.
Financial Tools :- Stock Average Calculator
Layoffs Which Companies Fired Most Employees
Amazon :- Amazon tech giant announced to cut 19000 employees and this is biggest layoffs in IT sector ever.
“This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” says by amazon CEO.
Microsoft :- Nadella also hinted that Microsoft overhired employees during the pandemic and that has led to some roles being redundant.
“We’re living through times of significant change, and as I meet with customers and partners, a few things are clear. First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.
Nadella write letter to employees and said good bye to 10000 techies. Microsoft also fired some good employees due to profit and investor force reasons.