The massive job cuts by Amazon.com Inc, one of the largest private employers in the United States, indicate a wave of layoffs in the tech sector, analysts said on Thursday. could last until 2023 as companies rush to cut costs.
As demand boomed during the pandemic quickly turned into bankruptcy, tech companies have laid off more than 150,000 workers by 2022, according to tracking website Layoffs.fyi, a number that is growing as it rises. Growth in the world’s largest economies began to slow.
Russ Mold, chief investment officer at AJ Bell, said: “There could certainly be more layoffs… given the size of investment we have seen in 2020-21, we would think a some degree of caution is probably appropriate.”
After the global pandemic, the rate of job cuts in 2022 has increased by 649% compared to 2021, led by technology companies, according to executive coaching firm Challenger, Gray & Christmas, Inc.
Falling demand amid soaring borrowing costs has prompted some executives in the sector to admit they were over-hiring during the COVID-19 crisis.
Meta Platforms Inc laid off 11,000 jobs last year, CEO Mark Zuckerberg says he wrongly predicted that the explosive pandemic would continue.
Tech giants Microsoft and Alphabet, Google’s parent company, have hinted at cost-cutting, including layoffs.
Salesforce Inc’s top boss, Marc Benioff, said on Wednesday that the enterprise software company was hiring “too many people” as he announced plans to cut jobs by 10%.
For Amazon, growth in the cloud division that generates most of its profits has slowed as businesses cut spending, while its online retail division is reeling from strained consumer budgets due to prices increased.
The growing crisis has brought back memories of the dot-com bubble at the turn of the century and the financial crisis of 2008 when tens of thousands of people lost their jobs.
“Some of us will remember the years 2000 to 2003 after a huge bubble fed by cheap money, high investor expectations and ample cash,” says Mold. “Whether we see a repeat or not will be interesting because there is a risk of that happening.”
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
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