The layoffs in the US tech industry marked last October the highest level since the pandemic of coronavirus and it is expected that the trend continue by the hand of one slowing economy, interest rates on the rise and balance sheets that baffle investors. only in that monththe sector lost 9,587 positions of work, the highest monthly number since November 2020in the midst of a pandemic, said the consultancy Challenger, Gray & Christmas, in an index that collects the various announcements made by firms in the areas of electronics, hardware, software and telecommunications.
The arguments of the main companies were aligned with the loss of company profitability and the need to cut costsespecially with the expectation of getting closer to a recession in the sector.
Just in the last two weeks, Meta and Amazon have disclosed combined job cuts of 21,000 after a smooth third trimester. Twitter cut 3,700 employees when the new owner Elon Musk, reestablished the business of the social media platform. Hatzius calculated that there were 34,000 layoff announcements from large-cap tech companies in November.
According to Hatzius, there are three reasons why these layoffs are not a sign of a recession.
Technology does not dominate the workplace
“The technology industry represents a small part of aggregate employment. For example, the unemployment rate would increase by less than 0.3 percentage pointseven in the unlikely event that all workers employed at the “Internet broadcast, publishing and web search portal” were immediately laid off, so any drag on the overall job market should be small.
Tech is still hiring
“The Tech job openings remain well above their pre-pandemic levelso laid-off tech workers should have a good chance of finding new jobs.”
history as a guide
“The Tech worker layoffs have skyrocketed frequently in the past with no corresponding increase in total layoffs and have not historically been a leading indicator of broader labor market deteriorationand layoffs in other industries still appear limited.”
Source: Ambito
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