Why Are Technology Companies Downsizing?

Nov 30, Kathmandu: Technology companies around the world keep cutting employees. Giants like Meta, Amazon, HP, and Twitter are also laying off a large number of employees.

According to one figure, at least 853 technology companies in the world have already laid off 137,492 employees. In addition, there are fears of an economic slowdown in northern countries. Amid fears of a global economic recession, many companies in the technology world have continued to cut staff.

Since the start of the COVID-19 pandemic, 1,388 technology companies have laid off 233,483 employees, according to data from the cloud-based database Lakoff. ft. According to this data, 2022 was the worst year for the technology sector. By November this year, American technology sector companies like Meta, Twitter, Salesforce, Netflix, Cisco, and Roku have laid off more than 73,000 employees. According to Crunchbase, companies like Robinhood, Glacier, and Better have also cut a significant number of employees.

The cuts will continue at Amazon

Companies like e-commerce company Amazon and computer maker HP have planned to cut 10,000 and 6,000 employees respectively in the coming days. Amazon CEO Andy Jassy has warned that many employees of the company will be laid off in early 2023.

Due to the reduction of a large number of employees, the work of various departments of the Amazon company has been affected. Notably, the Alexa virtual assistant business is set to lose $10 billion this year.

On the other hand, Google’s parent company Alphabet plans to lay off another 10,000 employees who are not performing well, which is 6 percent of its total workforce. According to a report in The Information, Google is planning to reduce 10,000 employees as part of the company’s new inventory and performance improvement plan.

Tech companies around the world are cowering due to the fear of economic recession. Earlier there was a huge jump in the sale of personal computers and laptops due to the Corona lockdown and working from home, but now that sector has slowed down.

At present, one of the main reasons for the reduction in the number of employees in technology companies is the appointment of more employees in the field of online business during the Corona period. Due to online work during the lockdown, companies have hired more employees than required. But now that the market has fallen, companies are constantly cutting staff to balance and reduce their costs amid the looming economic downturn.