More than 260,000 tech jobs have been axed this year as the industry battled to save cash, writes Leah Montebello. A total of 261,847 staff have been sacked since January, up more than 50pc from the 164,969 who were...
More than 260,000 tech jobs have been axed this year as the industry battled to save cash, writes Leah Montebello.
A total of 261,847 staff have been sacked since January, up more than 50pc from the 164,969 who were let go in 2022.
Some of the biggest names in the industry including Google parent company Alphabet, Amazon, Facebook owner Meta and Microsoft have made significant layoffs.
The cuts peaked in January when 89,579 people lost their jobs, impacting over 270 companies, according to data tracker Layoffs.fyi.
There have also been casualties in the world of crypto, which has been battered by ongoing instability. Coinbase and Crypto.com have both made significant cuts this year.
The tech industry has struggled over the past 12 months, in part due to rising competition and the withdrawal of budget from stretched advertisers.
As a result, more experimental projects have faced the axe since the companies realised the challenges of innovating in a much softer economic backdrop.
Microsoft boss Satya Nadella was forced to lay off 11,000 employees - equivalent to roughly 5pc of its workforce.
And just this month, Spotify said it would be sacking 1,500 - or about 17pc of its employees - as it battles to cut costs.
This is the third set of layoffs the music streaming giant has announced so far this year.
Spotify took advantage of cheap borrowing costs during the pandemic when central bankers cut interest rates in response to Covid.
Its chief executive Daniel Ek said: "We now find ourselves in a very different environment. Economic growth has slowed dramatically and capital has become more expensive.
"Spotify is not an exception to these realities."
And there is also the common thread of overhiring during the pandemic, which Amazon cited as the key reason behind its record cull of 27,000 jobs.
But iPhone maker Apple remains a major outlier that is yet to announce any major job cuts. Some analysts have said this is ultimately down to a more humble approach to hiring during the pandemic.
Its headcount increased just 20pc from 2020 to 2022, compared with a 60pc gain at Alphabet and a near-doubling at Amazon.
Alphabet and Amazon have slashed nearly 40,000 roles collectively this year.
Dan Ives, tech analyst at Wedbush, said: "Apple has prudently built out its employee base so never was caught off-guard by a softer macro with job cuts. Unlike many of the Magnificent Seven, it never got bloated and did not have to go through layoffs."
However, analysts believe the worst may be over, with one expert predicting "brighter days ahead in 2024", fuelled by investment in artificial intelligence.
Ives said: "We believe brighter days are ahead for 2024 as a soft landing is on the horizon with Big Tech in the early days of a $1trillion AI revolution."
One shining example of this area has been Nvidia, which has cashed in on this boom.
The US chip giant - which is crucial to AI - saw revenues in the three months to the end of October hit Ł14bn.
Daniel Ek, chief executive officer and co-founder of Spotify. Photographer: Akio Kon/Bloomberg via Getty Images
That was more than triple the same period last year and a record high.
It has also seen its shares more than triple in value so far this year, making it the best-performing stock in the S&P 500.
Ben Barringer, technology analyst at Quilter Cheviot, said: "There's optimism for a rebound in revenues, particularly in sectors like consumer electronics, PCs and cloud spending, which are showing encouraging signs.
"While some staffing adjustments might be necessary, large scale layoffs are unlikely. The industry is moving towards a recovery, prioritising stability over severe cost-cutting."
