What happened to Silicon Valley and Wall Street in the United States when hundreds of thousands of people were laid off?

　　China News Service, November 16th (Zhongxin Finance Gong Hongyu) In recent days, affected by inflation, the Fed’s interest rate hike and the haze of economic recession, Silicon Valley and Wall Street, which are the two barometers of the US economy, have been deeply involved in layoffs. Hundreds of thousands of people were laid off.

　　In the field of technology, according to the data provider Crunchbase, more than 60,000 American technicians have been "swept out" this year, and Wall Street investment banks represented by Goldman Sachs and Morgan Stanley have also embarked on layoffs due to the decline in net profits. the road.

Silicon Valley "big factories" enter the cold winter

　　"He was fired".

On the 13th local time, Musk tweeted that he had fired Eric Frohofer, an engineer who had worked on Twitter for 8 years, triggering many American netizens to watch.

Screenshot from Musk's Twitter account.

　　If the engineer was fired because he differed from Musk in terms of user experience, then the firing of thousands of Twitter employees is even more sudden.

　　Reuters quoted news from the technology website Platformer on the 13th that about 4,400 Twitter contract workers were fired.

Consumer News & Business confirmed that most employees did not receive any termination notices and only found out they had been made redundant after losing access to company email and internal communications systems.

　　According to an internal email sent to contractors obtained by Business Insider, Twitter explained that the layoffs were part of a "reprioritization and savings effort."

　　Twitter's current round of layoffs once again pushed the "dilemma" of American technology giants to the public.

In fact, this year, the cold wind of layoffs has blown through the entire Silicon Valley, and the scale of layoffs is still rising.

　　On November 14, according to the "New York Times", the American e-commerce giant Amazon announced that it may start laying off about 10,000 people this week.

According to previous news, in April this year, Amazon closed physical stores such as Amazon 4-star, Amazon Books and some pop-up stores.

In September, Amazon announced the closure of its telemedicine unit and laid off 159 employees.

　　In addition, well-known technology companies such as Microsoft, Meta, Apple, Stripe, and Netflix have also laid off employees in different proportions.

　　In October, "Business Insider" reported that Microsoft was forced to cut jobs again due to slowing revenue.

According to people close to Microsoft, the number of layoffs is just under 1,000, and it happened at different levels of the company, around the world and in various parts of the company -- including the Xbox department, strategic mission department, technology organization department and fringe teams.

　　"The Economist" reported that on November 9, Meta, the parent company of Facebook and Instagram, announced that it would lay off 11,000 employees, accounting for 13% of its total workforce.

This is also Meta's first mass layoff in its 18-year history.

　　In early November, the financial technology company Stripe announced that it would lay off 14% of its workforce; in August, Apple dismissed about 100 contract recruiters and has suspended almost all recruitment; in May, the streaming video giant Netflix laid off 150 people.

New York, USA.

Photo by Zhongxin Finance Gong Hongyu

The performance of the six major industries all fell, and Wall Street

　　As the list of layoffs of technology companies continues to increase, the wave of layoffs has also begun to spread to the "heart" of American finance-Wall Street.

　　New York-based Citigroup laid off about 50 dealmakers last week, Consumer News and Business Channel reported.

People at JPMorgan also said underperforming employees could be at risk.

JPMorgan will resort to selective layoffs, attrition and reduced bonuses at the end of the year to rein in spending.

　　In addition, Goldman Sachs said it would cut 2,700 jobs in the fourth quarter and plans to cut a total of 9,000 jobs by 2025.

　　A number of US media analyzed in their reports that the wave of layoffs on Wall Street was affected by the decline in net profit in the third quarter.

　　The third-quarter financial reports released by the six major Wall Street banks showed that JPMorgan Chase's net profit fell by 17% year-on-year; Citigroup's net profit fell by 25% year-on-year; Wells Fargo's net profit fell by 31% year-on-year; Net profit fell by 8% year-on-year; Goldman Sachs was the most severe situation, with net profit falling by 43% year-on-year.

　　Affected by the Federal Reserve's interest rate hike and the slowdown in economic growth, the IPO business, which is an important source of investment bank performance, has been hit hard.

According to data released by the Securities Industry and Financial Markets Association (SIFMA), as of October this year, as the IPO market was basically frozen, stock issuance plummeted by 78%. At the same time, bond issuance has also declined significantly as the Federal Reserve raised interest rates. , down 30% as of September.

American Wall Street.

Photo by Zhongxin Finance Gong Hongyu

Under the haze of economic recession, the "tide of layoffs" spread to many industries

　　In addition to technology giants and Wall Street investment banks, industries such as retail and real estate in the United States cannot escape the dilemma of layoffs.

　　For example, the real estate company Redfin announced on November 9 that it plans to lay off another 862 people this year, accounting for about 13% of its total workforce.

Retail giant Walmart announced in October that it was laying off nearly 1,500 workers.

　　Not only well-known companies, according to the statistics of FYI, a company layoff tracking organization, in 2022, 600 American technology start-up companies will lay off about 80,000 employees in total.

　　Regarding the reasons for layoffs, in letters to employees and in public, technology companies attribute it to the deteriorating economic situation.

"Business Insider" issued an article pointing out that the slowdown in business growth and the increase in labor costs are the main culprits for large companies to choose to reduce costs and increase efficiency.

　　On November 15, Reuters reported that the U.S. economic recession may come at any time.

U.S. companies are slashing their workforces as part of a corporate restructuring in response to a possible economic downturn from the Federal Reserve's fight against inflation.

　　Since 2022, U.S. inflation has remained high, consumption has slowed down, and weak domestic demand has dragged down economic performance.

In response to persistently high inflation, the Federal Reserve has raised interest rates for six consecutive rounds.

The austerity policy has made the prospects for US economic growth even more bleak.

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