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Layoffs tick up at big tech with high inflation, recession fears

Layoffs recently ticked up at big technology companies in the US and Europe because of record inflation, higher energy costs and central banks aggressively raising interest rates that triggered recession fears.

Technology companies increased hiring to meet higher consumer demand during the coronavirus pandemic but the table has turned in 2022.

Inflation around the world has climbed to its highest level in almost 40 years, forcing central banks to make rate hikes since late 2021, which significantly lowered the amount of capital and liquidity in the markets that is essential for investment.

Russia's war against Ukraine also spiked energy prices, further slowing the pace of global growth and dimming economic outlooks.

As a result, big technology companies have been laying off staff or putting a pause on new hires at an unprecedented speed in an attempt to cut costs.

A total of 788 tech companies have laid off 120,699 employees around the world since the beginning of 2022, according to data tracker website, Layoffs.fyi.

More than 67,000 workers in the US technology industry have been laid off this year, according to a report by business information provider Crunchbase.

Tesla began a 10% cut in staff in June. The American electric carmaker workforce stood at 100,000 by the end of 2021, according to a Securities and Exchange Commission (SEC) filing.

US-based cryptocurrency exchange platform, Coinbase Global, also announced in June that it will reduce the size of its workforce by 18% due to turmoil in the crypto market, which lost more than $1 trillion in market cap in just a few weeks this summer.

The global crypto market has lately been hit hard by the bankruptcy filing of exchange platform, FTX, the world's third-largest by trading volume. While the price of Bitcoin was trading Wednesday around $16,500, the value of the crypto market was just above $800 billion -- significantly lower than its all-time high of $3 trillion last year.

By comparison, the market capitalization of gold is currently around $11.8 trillion.

US ride-hailing company, Lyft, announced earlier this month that it plans to lay off 13% of its workforce, affecting thousands of employees, due to a slowdown in the American economy and a potential recession next year. Lyft has more than 5,000 employees, including around 650 who will be affected by the move.

Elon Musk trimmed approximately half of Twitter’s 7,500 workers two weeks ago after his takeover of the company.

Major brands such as General Motors, General Mills, Volkswagen and Audi of America have paused advertising on Twitter amid marketing uncertainty since Musk bought the social media platform for $44 billion.

Facebook’s parent company, Meta, laid off more than 11,000 employees last week, cutting its workforce by 13%.

Most recently, Amazon has begun trimming jobs Tuesday at its Alexa unit and Luna cloud gaming division, according to several LinkedIn posts from employees. The e-commerce behemoth aims to eliminate 10,000 jobs, according to a report by The New York Times.

While chipmakers Intel and Qualcomm are reported also cutting their workforces, Microsoft's layoffs affected 1,000 employees, according to reports.

Canadian e-commerce firm Shopify, American cloud-based software company Salesforce, US-based social media company Snap, data storage company Seagate, real estate online firm Opendoor, online finance company Chime Financial and Irish-American financial services firm Stripe are among those reportedly trimming their workforces along with technology companies.

In Europe, Swedish heavy industry firm Alfa Laval, conglomerate Husqvarna and financial technology Klarna are among the companies that will layoff employees.

After Dutch online travel agency Booking.com cut 25% of its workforce in 60 countries in 2020 and 2021 due to the pandemic, it is laying off another 2,700 call center jobs.

AirFrance, the flag carrier of France, Finnair, the largest airline of Finland, German multinational chemical and consumer goods company Henkel, renewable energy firm Siemens Gamesa, manufacturer Schaeffler and Dutch electronics maker Philips are planning to make significant reductions to their workforces.

Source: Anadolu Agency