The bad news came through their personal emails and, for some, on the Slack professional messaging app.
Others were fired on Twitter in full view of everyone, while some learned of it when they were denied access to their computers.
The past few months have been an emotional and professional roller coaster for tech employees, who more often than not make up the largest tranche of white-collar workers.
Every month, or even almost every week, since summer 2022 has been marked by announcements of job cuts. Almost all levels, including executives, are affected. Marketing and human-resources personnel are no longer the only casualties.
Once considered a protected commodity, engineers working on artificial intelligence are no longer assured that they'll stay employed.
Almost 100,000 Tech Jobs Cut in 2022
As consumers and investors anticipate a recession, white-collar tech workers in the U.S. are already in the midst of one.
In 2022, the tech sector cut 97,171 jobs. according to a recent report from outplacement services firm Challenger, Gray & Christmas. This was more than seven times the number of 2021, when 12,975 jobs were lost in the tech sector.
The sad record of 2022 made tech the top industry in terms of job cuts, triple the automobile industry's 30,912 jobs cut. In the end, tech accounted for more than a quarter (27%) of all job cuts in the U.S. (363,824 jobs) last year.
"The overall economy is still creating jobs, though employers appear to be actively planning for a downturn," said Andrew Challenger, senior vice president at Challenger, Gray & Christmas. "Hiring has slowed as companies take a cautious approach entering 2023."
The job-cut bloodbath continues in 2023 and is even on track to break records.
Microsoft (MSFT) and Alphabet (GOOGL), via its Google subsidiary, have just announced 10,000 and 12,000 job cuts respectively in 48 hours. Just 20 days into the year, 38,815 tech jobs have been cut, according to data startup Layoffs.fyi. These workforce reductions were announced by 133 companies.
Apple (AAPL) remains the only company that has yet to announce any layoffs.
Hiring at Full Speed - and Then Inflation Kicked In
This avalanche marks a new reality for the tech sector, which hired at full speed in 2020, 2021 and 2022 as the global economy became dependent on technologies.
The sector had become the path for social interactions during the two years of covid lockdown. Consumers shopped online and broadly communicated through tech products and services.
But the economy is now slowing, mainly because of inflation. Price gains for goods and services in many Western countries are at their highest in 40 years, forcing central banks to raise interest rates, which makes access to credit expensive.
In the U.S. many economists believe that the aggressive rise in interest rates will cause a so-called hard landing in the economy -- a recession. The tech sector tends to perform well when the economy is healthy and confidence is high.
Consumers tend to spend on tech products and services when things are going well. But as soon as the economic situation deteriorates, they begin to be cautious, favoring necessary purchases, often to the detriment of tech.
"Over the past two years we’ve seen periods of dramatic growth," Google CEO Sundar Pichai wrote in an email to employees. "To match and fuel that growth, we hired for a different economic reality than the one we face today."
Customers Doing More With Less: MSFT's Nadella
The tone is also alarmist at Satya Nadella, the CEO of Microsoft.
"As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” he wrote to employees on Jan. 18. "We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.”
Nadella had warned in early January that the tech industry should be prepared for the next two years to be challenging.
"I would say the next two years are probably going to be the most challenging, because after all, we did have, you know, a lot of acceleration during the pandemic, and there is some amount of normalization of that demand," he told CNBC.
If Big Tech, for example, is massively cutting jobs, it is still very profitable and posts substantial revenue. Microsoft reported net income of $17.6 billion and revenue of $50.1 billion last quarter. Alphabet for its part reported net of $13.9 billion on revenue of $69.1 billion.
