Chinanews.com, February 4 (Xie Yiguan, China News Finance reporter) "Capitalism is ruthless. When recruiting people, it is a talent. When laying off employees, it is a data point in the database. It is a 'lucky goose' selected by a random program." .” The Google employee from Singapore had just recently received a layoff notice.
Since last year, a storm of layoffs in Silicon Valley has spread from the San Francisco Bay Area in the United States, leaving tens of thousands of employees of technology companies facing unemployment.
The former "high wages" and "high benefits" are now accompanied by a notice, all of which have disappeared.
Google, Microsoft, Amazon... 10,000 layoffs!
On January 20, Google CEO Pichai announced in a letter to employees that he would lay off about 12,000 employees worldwide.
According to foreign media reports, the layoffs are the largest layoffs in the company's history, accounting for about 6% of its global workforce.
Video: Google employees protest mass layoffs and low wages
Source: China News Network
When Google, known as the "Silicon Valley Nursing Home", also joined the ranks of layoffs, many technology company employees felt the bone-chilling "cold".
Not only Google, but American technology giants Microsoft and Amazon have also started mass layoffs of 10,000 people.
Microsoft recently stated that it will lay off 10,000 employees by March 31; Amazon also recently mentioned that it will lay off more than 18,000 employees, which is also the largest layoff in the company's history.
When people have not yet come out of the shock, the electronic payment giant PayPal announced at the end of January that it will lay off 2,000 full-time employees worldwide in the next few weeks.
If the timeline is extended, this wave of "layoffs" by technology companies began to ferment in the first half of last year and reached a peak in November last year.
That month, Twitter laid off about 50% of its employees; Meta announced layoffs of 11,000 people; Amazon said it might lay off about 10,000 people...
A Meta employee who has seen the big layoffs in Silicon Valley in November 2022 said, "The psychological shock is particularly strong, and it is the first time I have truly experienced the recession and layoffs."
Data from the Layoffs.fyi website, which tracks technology company layoffs, shows that 1,040 technology companies will lay off workers in 2022, and nearly 160,000 employees will be laid off.
According to data from Challenger, Gray & Christmas, an American employment consulting company, in November 2022 alone, the technology industry announced 52,771 layoffs, setting a record since the company began to collect relevant data in 2000.
Entering 2023, the "storm" of layoffs will become more violent.
According to the Layoffs.fyi website, in the first month of 2023, more than 200 technology companies will lay off employees, and more than 80,000 employees will be dismissed.
"Although I was lucky enough to survive the layoffs of 'The Hunger Games', it is still thrilling to think about it. This wave of layoffs feels much harsher than the last wave." A netizen working in the United States said recently.
The mass layoffs of technology companies have also raised the issue of the status of foreign employees in the United States.
Chen Chuanchang, a Chinese software engineer who has worked for a technology giant in Silicon Valley for more than ten years, said that in this round of "layoffs", young people who have been laid off are under greater pressure.
Because of their low qualifications, these people have no advantage in the labor market.
Some of them are working in the United States with H-1B visas. If they cannot find a job within two months, they will leave the United States.
Even if there are companies still recruiting, the scale is limited.
Some young people have difficulty finding the opportunities they want.
Why do tech giants choose to lay off employees?
In the early stage of the new crown pneumonia epidemic, technology companies used their own advantages to advance all the way, and launched large-scale recruitment activities one after another.
Why are these technology companies now on the road to layoffs?
On November 9, 2022 local time, people take pictures at the Meta headquarters in Menlo Park, California, USA.
The company said on the same day that it would cut 11,000 jobs.
Photo by China News Agency reporter Liu Guanguan
"I was wrong, and I am responsible for it." Meta CEO Mark Zuckerberg said of the layoffs, "At the beginning of the epidemic, the world quickly turned online, and the surge in e-commerce brought huge revenue growth. Many people predicted , it will be a permanent acceleration that will continue even after the epidemic is over. I thought so too, so decided to increase investment significantly. Unfortunately, things did not turn out as I expected. E-commerce resumed the previous In addition, the downward trend of the macro economy, the intensification of competition, and the decline in the advertising business have resulted in far lower revenue than expected."
Not only Meta, but also sorting out the reasons for layoffs given by technology companies, the economic downturn, over-employment, high inflation and high interest rates under the epidemic have become "high-frequency words".
"The development of technology companies in the early stage is a bit too fast, and there is a certain degree of blindness. After excessive expansion, there may be an adjustment process; the strengthening of global control has also led to a decline in the profits of multinational technology companies." Chen Fengying, a researcher at the China Institute of Contemporary International Relations, told the reporter of Zhongxin Finance. The contraction of the world economy and the tension in international relations also have an impact on the development of multinational companies.
Xu Hongcai, deputy director of the Economic Policy Committee of the China Policy Science Research Association, also said, "Although there are internal reasons for the layoffs of companies, but in general, it is also because of the global economic downturn that companies are having a hard time."
On October 28, 2022 local time, pedestrians passed near the Twitter headquarters building in San Francisco, California, USA.
Photo by China News Agency reporter Liu Guanguan
The "locomotive" halo is no longer, will the US economy enter a recession?
"'Layoff wave' is reminiscent of the Internet bubble at the beginning of this century." Reuters reported that from 2000 to 2003, cheap funds, high investor expectations and abundant cash flow gave birth to a huge bubble in the technology industry.
Now that the staff of many technology companies has shrunk on a large scale, does it mean that the technology industry, which has experienced years of strong expansion, is facing a recession?
"At present, the living environment of technology companies has undergone tremendous changes, and unlimited expansion is also restricted. Under the new situation, how to break through new technologies and how to expand new markets has become a new problem." However, in Chen Fengying's view, "This does not mean that the technology industry If we want to go into recession, but technological innovation has reached a bottleneck stage, we must have a breakthrough.”
As the strongest "locomotive" of the U.S. economy for many years, does this wave of layoffs initiated by technology companies in the San Francisco Bay Area also herald a recession in the U.S. economy?
According to CNBC (US Consumer News and Business Channel), economists believe that while these layoffs are sudden and undoubtedly disruptive to those affected, it is not a wave of layoffs that heralds a recession .
A more important indicator of an imminent recession is the decline in hiring of temporary workers and the increase in layoffs, especially in manufacturing, said Nera Richardson, chief economist at ADP.
At the end of 2022, a U.S. index measuring factory activity will contract for the first time since 2020, and "manufacturing is usually where recessions start," Nella Richardson said.
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