It seems like the seemingly impregnable, and ‘inflation-resistant’ Tech industry has finally begun to show a few chinks in its armour. Or rather, it’s being battered like a piñata.

With news of a 50% drop in net income for the third quarter, Meta (formerly Facebook) recently announced its decision to lay-off 13% of its workforce, translating to roughly ~13000 people who began receiving curt farewell emails, and subsequent excommunication from their systems. And it’s not just Meta. With Twitter’s recent acquisition, Elon Musk promptly announced they were looking to shed 50% (~3700) of their workforce.

Stripe payments? 15%. Snap? (Snapchat) 20%. Lyft? 13%. Amazon is rumoured to be cutting 10000 jobs off their payroll in the near future. And this isn’t news, it’s been happening for months. As of now, almost all of the FAANG companies, traditionally the best-performing technology and most well-known companies in the world, representing ~20% of the overall tech market, have some kind of hiring freeze in place. That includes Microsoft, Apple, Meta (Facebook), Google, and Amazon.

But how will this affect the rest of the economy? I’m no economist, but here are some interesting statistics to ponder over from Zippia.

  • The U.S. tech market accounts for 35% of the total world market.
  • The U.S. tech industry is in second place for driving the U.S. economy.
  • The ‘Big Four’ and Microsoft make up approximately 20% of the overall tech market.
  • In 2020, the tech industry accounted for 10.5% of the total U.S. GDP.

That means a lot of people left fresh without a job, are now going to have to fight to find a replacement, and hope they don’t fall victim to further cuts, in an industry where the walls seem to continue to cave in, with no end in sight. Furthermore, what are the ramifications of the ripple effect this will undoubtedly have on the wider market as a whole? Time will tell, but my hunch is that what’s happening in tech industry is an early reflection of what’s to come to the wider market.

–

Update: Here’s an interesting site I found that has been tracking tech lay-offs for some time now.