What Tech Job Cuts Say About Silicon Valley—and the Rest of the Economy
Dozens of companies are shedding significant portions of their workforce after years of growth.
After a scramble for labor coming out of the Covid-19 pandemic, the US economy has shown signs of reversing course. US employers announced 13% more job cuts in 2022 than they did the year before, according to consulting firm Challenger, Gray & Christmas Inc. The reductions were small; setting aside 2021, last year saw the fewest annual job cuts since CGC began tracking in 1993. Still, any tightening in the job market begins to tilt leverage back to employers, threatening a brief period of worker empowerment that gave rise to concepts like the Great Resignation, quiet quitting and a generation of professional workers who could supposedly spend their whole careers working from camper vans in Idaho.
There is one sector where the trickle has already become a flood. According to Challenger’s numbers, the tech industry in 2022 increased its announced job cuts by 649%, with the total of 97,171 amounting to the highest since the dot-com crash more than 20 years ago. This year doesn’t look any better. So far in January, Amazon.com Inc. has said it expects to lay off 18,000 people, Microsoft Corp. has announced 10,000 job cuts, and more than two dozen US-based tech companies including Coinbase, Flexport and Salesforce have said they’ll cut their workforce by 10% or more, according to the website layoffs.fyi, which has been tracking job cuts in the industry.