What do companies as diverse as Twitter (TWTR), Tesla (TSLA), Netflix (NFLX), Coinbase (COIN), Snap (SNAP), Shopify (SHOP), Oracle (ORCL) and Crypto.com have in common?
After many months of strong hiring, all have laid off workers in the last years. The problem has been particularly acute in the tech industry, which is prone to hiring boons during good times and layoffs during times of inflation.
Business platform Crunchbase predicts that more than 44,000 workers in the tech space have lost their jobs since the start of 2022.
Microsoft (MSFT) is the latest tech company to jump on the layoff bandwagon. The tech giant employs 221,000 people globally and, according to a report by Axios that Microsoft later confirmed, laid off just under 1,000 of them across multiple positions and divisions.
Microsoft Confirms Layoffs Report
"Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly," a Microsoft spokesperson told TheStreet. "We will continue to invest in our business and hire in key growth areas in the year ahead."
While the layoffs affect less than 1% of Microsoft's total workforce, many former employees took to Twitter to express how the layoffs caught them off guard after getting hired during a boon.
In between 2021 and 2022, Microsoft had increased its workforce by more than 22% — or roughly 40,000 people.
"Welp, who's got two thumbs and just got laid off from Microsoft this morning?" KC Lemson, who started with the company more than 20 years ago and worked on features such as Outlook, Exchange, Windows Phone and Surface, wrote on Twitter.
Short of widespread layoffs, some companies have also frozen hiring. In September, Facebook and Instagram parent company Meta (META) announced a hiring freeze for the rest of the year.
"I had hoped the economy would have more clearly stabilized by now," founder Mark Zuckerberg said during a Q&A session. "But from what we’re seeing it doesn’t yet seem like it has, so we want to plan somewhat conservatively."
The Real Truth Behind The Tech Layoffs
Each company's layoffs receive widespread news coverage given that the tech industry has, for decades, been seen as one promising both high salaries and stability.
While high interest rates and inflation are definitely sending ripples across the industry after a long period of growth, the situation is also not uniform across the country.
While the number of tech jobs remained unchanged between July and August in San Francisco, a study from the Center for New York City Affairs found that tech jobs in New York grew by 4% between February and August.
At 3.5% in September, the U.S. unemployment rate is also very low historically — signalling that a restructuring may be more likely than a full-on recession. Some have also predicted a gradual move away from Silicon Valley as more than four out of 10 job postings for tech jobs are now outside California, Oregon and Washington.
But one segment of the industry that is in trouble at least for the short term is the tech recruiter. A new study of major tech companies from interviewing.io found that layoffs affected 50% of recruiters and 48% of HR staffers.
"I was just told to, like, not source," Tim Nelson, who worked on the sourcing team for six months at DocuSign (DOCU) before being laid off, told Protocol. “I totally understand why I got laid off."
UPDATE: This article has been updated to include a statement from Microsoft.
