If you have been keeping up with the news recently, you would have noticed that many giant tech companies worldwide are facing serious employment issues, resulting in hiring freezes and large layoffs.
For those who remember the dot-com crash, this comes as no surprise, as the tech industry is well known for over-hiring during the boom times and making drastic cuts once the market turns. In their layoff tracker, Layoffs.fyi account for 814 tech companies terminating positions, with 128,865 employees being laid off as of November 17th 2022.
In this article, we detail some of the biggest layoffs recorded this year and examine why they are happening.
Biggest 2022 layoffs so far
Meta
Recently, Meta made it in the headlines with their latest round of 11,000 layoffs, as they cut a large number of employees from their arts and design division, formerly known as Facebook Open Arts. This marks Meta’s most significant job cut in its 18-year history, as a result of their stock falling over 70% in 2022, combines with their metaverse-focused sector, Reality Labs reportedly losing billions with each quarter this year.
This brings forward concern for the future of Meta, as their plan of action remains unclear. Earlier in the year, CEO Mark Zuckerberg was quoted saying that the company is aiming to slow down on hiring, planning to hire 6,000 – 7,000 engineers, which is a drastic change from his initial target of 10,000.
As it currently stands, Meta will have laid off 13% of its workforce in 2022.
Elon Musk Twitter
Another tech giant in the news recently is Twitter, primarily due to Elon Musk’s controversies attempting to make Twitter into the social media platform he envisioned.
After evaluating Twitter’s current processes and current spending, Musk claimed that in 2022, Twitter’s revenue fell by 1%, with the social media giant reportedly losing US$4 million per day. His action plan to tackle this challenge began with laying off a large number of employees, starting with top executives and moving down through the hierarchy.
As of November 2022, Twitter has terminated 3,700 jobs, losing around 50% of its workforce.
Snap
After Snap’s stock price plunged over 75% YTD, CEO Evan Spiegel announced that the company would be restructuring, starting with the layoff of 20% of its global workforce. For Snap employees, this means that 1,300 out of 6,400 employees will be losing their jobs this year. In addition, Snap plans to pull the plug on some of their recently announced projects to streamline their workflows.
Despite these worrying statistics, Snap’s investors are responding positively, with the company’s stock gaining nearly 7% since the layoff announcement.
Amazon
One of the most shocking reports this year came from Amazon’s Alexa domain, recording a loss of almost US$5 billion this year.
As a result,, CEO Andy Jassy documented that they have lost a worrying amount of stock value. This forced the tech giant to undergo a revenue crunch, reviewing its least profitable units and branches with the slowest growth.
Earlier this year, Amazon’s senior vice president Dave Limp wrote on Amazon’s public blog, “After a deep set of reviews, we recently decided to consolidate some teams and programs. One of the consequences of these decisions is that some roles will no longer be required”.
As of November 2022, the e-commerce platform has laid off 3% of its workforce, with 10,000 previous employees back on the job market.
Why is this happening?
When looking at why the tech sector is forced to let a large proportion of their employees go, we can spot some trends that apply to the cases with the most extensive layoffs.
Consequence of over-hiring
During the COVID pandemic, the world moved to be online. This vastly expanded the market for tech companies, as people were purchasing items online, using streaming services, social media platforms and other services at an abnormal rate. Subsequently, tech companies began hiring more staff to keep up with the user demands and ensure everything ran smoothly.
In a post-pandemic world, where the internet boom has resulted in overestimations of the success to follow, companies are finding themselves in a position where their revenue streams are decreasing and are forced to let go of a lot of the staff that is no longer needed.
Economic challenges
Due to inflation, operational changes and labour shortages seen in the retail industry, companies have decided to cut their spending on online advertisements, affecting numerous tech giants.
In addition, as reported by Forbes, the current state of the economy has made it exceedingly difficult for investors to continue funding the tech sector, resulting in a loss of tech’s most major source of income to date.
New developments in AI
Over the past few years, we have seen incredible technological advancements, especially in AI. With businesses becoming increasingly aware of the benefits of using AI, combined with the cost per employee, some companies are starting to replace specific jobs with newly developed AI, thus resulting in many employees no longer being needed.
Future Uncertainty
One of the biggest fears of any company within the tech sector is failing to keep up with the market’s demands. Due to new companies and features being launched at a rapid rate, the already-established tech giants are experiencing a severe case of FOMO. They are forced to not only keep up with new features but also bring out new and innovative products.
This can be seen in Facebook implementing Snapchat’s own ‘Stories’ feature, Instagram’s reels (inspired by TikTok), and both Snapchat and TikTok launching their own versions of the newest competitor in the game – BeReal. In many cases, this does not only cause the company to steer away from their original business plan but has resulted in many projects losing out financially.
Following the failures of these ambitious projects, employees have been laid off in the process.
Content Creation Marketing Agency
Did you enjoy this article? Are you struggling to create your own well-optimised, engaging content? At FireTap Marketing, our team has extensive experience in writing excellent content for legal and professional services in London and the UK.
Please call our team today on 020 3911 9715, email hello@firetap.co.uk or fill in this contact form for more information.
