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Tech sector redundancies reach 210,000

It’s been reported that since 2022 technology companies have reported over 210,000 job layoffs. With 55,000 in January 2023 alone.

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Tech sector redundancies reach 210,000

It’s been reported that since 2022 technology companies have reported over 210,000 job layoffs. With 55,000 in January 2023 alone.

The latest companies to announce redundancies plans are Google, Microsoft and Spotify.

Google announced that 6% of its workforce will be let go. As well as redundancies at Microsoft with a 5% reduction in total staff and 600 jobs to be cut at Spotify.

These tech giants were not the only companies to announce layoffs recently. WeWork, Amazon and Salesforce are joining the trend that is predicted to continue throughout 2023.

This month, January has been reported to have the second-highest number of layoffs in a month since Q3 2020. That’s without the month even closing.

During the pandemic, many tech companies overhired when worldwide online activity hit an all-time high.

Reports from layoffs.fyi have stated a total of 40,474 tech jobs were cut in January 2023 from 151 different companies.

This doesn’t even include the 12,000 that Google announced just a few days ago.

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    Tech companies reducing their workforce

    Tech companies considering redundancies include small and large businesses. Some companies are seeing a worldwide reduction.

    Here’s the list of some of the tech companies that have announced layoffs in 2023:

    • Google
    • Microsoft
    • Spotify
    • WeWork
    • Amazon
    • Stitch Fix
    • Salesforce
    • Vimeo
    • ByteDance
    • Teladoc Health
    • Riot Games
    • Hootsuite
    • Twitter

    There are many more announcing redundancies, but the main two are Google and Microsoft. We will run through it so you can understand more about what this means for the tech industry.

    the outside of one of the Microsoft offices where staff are being laid off

    12,000 redundancies to be made at Google

    The CEO of Google, Sundar Pichai announced 5 days ago that immediate redundancies in the US would be made.

    Layoffs will also be taking effect across other countries too. These however will take longer due to local laws.

    Redundancy staff will receive 16 weeks of severance pay and an extra two weeks of pay for each year they’ve worked.

    10,000 staff redundancies at Microsoft

    On January 18th, the CEO of Microsoft Satya Nadella announced that they will be reducing their workforce by 10,000 employees in the US.

    Microsoft’s worldwide workforce will also be reduced by around 220,000. Nadella said the workforce reduction was due to the shifting economic environment.

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    Why is the tech sector reducing its workforce?

    Silicon Valley, the biggest tech hub in the world, has been somewhat of a guide to what can be expected for the rest of the tech world recently. With people looking on cautiously to see what is next.

    The tech industry has always been heavily reliant on advertising income. But with businesses cutting back, it was unavoidable that they would feel the impact.

    Some HR and employment specialists believe the sector’s focus on hypergrowth is what has made it susceptible to macroeconomic factors.

    Due to the pandemic tech companies insistently hired over the past two years. With many growing too big and fast without thinking about how long the pandemic would last.

    Apple park in silicon valley California

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    Expert advice on redundancies

    With the cost-of-living crisis hitting not only tech companies but other sectors too, it can be a difficult time for employers that need to dismiss employees.

    If you’re an employer and need extra help with what you legally can and cannot do, we’re here to help every step of the way.

    Please speak to one of our HR and Employment Law advisors free today at 0800 152 2287.

    The Employer’s Direct helpline is available 24/7. Fill in the form here to request a callback.

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    FAQs

    We’re here to answer any questions you might have with expert ease.

    After tech giants in Silicon Valley have started to lay off staff this month it’s likely that those in the UK will be let go in the coming months.

    Apple has so far managed to avoid any mass redundancies.

    The Bank of England expects unemployment to increase from its current low of 3.6% to around 6.5% by 2025.

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