Tech companies have been laying off people since 2020, with the rate accelerating in 2022 and 2024. The big names making headlines are Google, Microsoft, and Amazon. However, smaller companies are reducing staff too.
What’s going on? Many believe that the layoffs are a precursor to a recession. Investors want to see revenue growth, and that’s not easy with a slowing economy. Others think that the COVID-19 pandemic caused over-hiring during the hiring boom and now, as habits return to pre-pandemic levels, these tech companies are righting their ship.
Regardless of the reason, these large tech layoffs have ripple effects. They can impact the job market, causing companies to increase competition for talent and lower workforce morale. Additionally, layoffs can lead to a decline in productivity and profitability, which can cause businesses to reassess their strategies and priorities.
A tech layoff can also provide an opportunity for a company to reevaluate their team and culture. For example, one SaaS company went through a round of layoffs and found that it was able to focus on the most essential team members and increase employee retention.
Small business owners in any industry can be impacted by these layoffs, especially if they are heavily dependent on technology for their day-to-day operations. It’s important for these entrepreneurs to keep abreast of the latest technology trends and make sure their teams are well-equipped to meet new challenges. They can also consider freelancing or taking on side projects to boost their skills and income.