U.S. tech industry companies saw a sharp increase in layoffs in May. What happened to them?

[Rui Kan US] The number of layoffs of US technology industry companies increased significantly in May. What happened to them?

　　China News Service, June 30 (Reporter Xie Yiguan) Layoffs!

Layoffs!

Layoffs!

The recent layoffs have swept across many regions of the world like a storm, and many companies including Tesla and Netflix have started a staff reduction mode.

The number of layoffs in the US technology industry in

　　“On June 1st, less than 24 hours after our team was guaranteed no layoffs, the company I worked for fired me and a bunch of other people. I’ve been looking for a job for the entire month of June, and it’s like an obsession. "An overseas netizen said recently.

　　On foreign social media sites, many netizens have recently shared their experiences of being fired.

　　Tesla has even faced employee lawsuits over layoffs.

Tesla CEO Elon Musk also said on the 21st that Tesla is moving forward with plans to lay off about 10% of its salaried employees.

　　As of the end of 2021, Tesla has about 100,000 employees worldwide, and a 10% layoff means about 10,000 employees will be forced to leave.

　　But as one netizen said, "A large number of companies are laying off workers at all levels, and this is not unique to Tesla."

　　Recently, Netflix confirmed to the media that it will lay off about 300 employees, which is the third round of layoffs this year; PayPal has also laid off employees engaged in risk management and operations in response to rising costs; Companies announced to suspend hiring plans or scale back hiring, including Twitter, Meta, and more.

　　According to a report released by employment consulting firm Challenger, Gray & Christmas in early June, companies in the U.S. technology industry announced 4,044 layoffs in May, an increase of 781% from the number of layoffs announced in the previous April. New highs ever.

　　Outside the technology industry, this wave of layoffs in the United States is also concentrated in areas such as financial technology, real estate, automobiles, and healthcare.

Layoffs sweep across many regions of the world

　　Not only the United States, but also in Europe, Latin America, Asia and many other regions around the world.

　　In Europe, British used online car retailer Cazoo plans to reduce its workforce by 15%, which will affect 750 jobs; Turkish instant delivery company Getir announced a global layoff of about 14%, involving about 4,500 positions; Swedish fintech company Klarna also Plans to lay off 10% of the global workforce.

　　In Latin America, there have been reports of layoffs from Brazilian e-commerce software company Vtex and Mexican cryptocurrency platform Bitso.

　　Combing the list of the recent wave of layoffs, it can be found that many of them belong to start-ups, which are also the "hardest hit areas" for the layoffs.

　　On June 20, India's emerging information media Inc42 released a report: So far, 27 start-up companies have laid off 10,029 people, including unicorn companies such as Vedantu, Cars24, Ola, Meesho, MPL and Unacademy.

　　Hundreds of employees have been laid off at start-ups in Southeast Asia over the past few months as the global economy slows, involving at least half a dozen tech companies, including Sea Limited, the parent company of Singapore-based e-commerce platform Shopee, CNBC reported.

Investors said the next few months could see more layoffs in the tech sector.

Are the best days of the labor market over?

　　"The best days for the labor market are over," said Christopher Rupkey, chief economist at FWDBONDS in New York.

Data map: New York, USA.

Photo by Zhongxin Finance and Economics Gong Hongyu

　　In the past two years, a number of companies have expanded recruitment in order to adapt to business growth and meet the sudden influx of demand after the economy reopens, and the labor market has also "rose."

　　Amazon is adding about 800,000 employees in 2020 and 2021 in an unprecedented hiring spree.

The total number of full-time employees at Meta, Apple Inc., Microsoft and Google parent Alphabet Inc. has nearly doubled over the past five years to about 563,000 people.

　　"Although job vacancies are still serious at the macro level, at the micro level, companies such as Amazon and Walmart have reported the erosion of corporate profits due to rising labor costs due to 'overstaffing' (overstaffing) due to the rapid return of labor after the new crown pneumonia epidemic." Industrial Securities pointed out that the deviation of macro and micro data may be reflected in the tendency of enterprises to lay off employees and turn to temporary labor with lower costs.

　　Musk said when he announced the layoffs that he hoped to add some hourly temporary workers.

　　At the same time, slowing consumer demand, high inflation and the Federal Reserve raising interest rates are making the global economic situation worse this year.

Companies are laying off workers, especially among start-ups, amid cost-cutting and concerns about economic expectations.

　　“Many tech startups that saw huge growth in 2020, especially in real estate, finance and delivery, are starting to see a slowdown in user numbers, coupled with inflation and interest rate issues, retooling their workforce to cut costs and Consolidate capital," said Andrew Challenger, senior vice president at Challenger, Gray & Christmas, Inc.

　　"Although there are internal reasons for corporate layoffs, in general terms, it is also because of the global economic downturn that makes life difficult for companies." Xu Hongcai, deputy director of the Economic Policy Committee of the China Society for Policy Science, told Zhongxin Finance and Economics reporters, especially Startups are less able to resist risks.

　　Will this wave of global layoffs intensify?

"It is expected that the layoffs will continue," Xu Hongcai said. Affected by factors such as the new crown pneumonia epidemic, global inflation, and the situation in Ukraine, the future economic outlook is not clear.

(Zhongxin Finance)

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