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important point
- Combined, Amazon and Microsoft are laying off a total of 28,000 employees
- Wave of tech layoffs to continue through 2023
- The uncertain economic climate is one of the reasons behind the string of layoffs.
The current economic climate is highly volatile and fears of a recession have plagued the economy for months. According to the National Bureau of Economic Research, we have not yet reached an official recession. But mass layoffs in the tech industry show that economic conditions aren’t optimistic.
Let’s dive into the details of the latest wave of job cuts and find out why we’re seeing these historic layoffs.
what’s happening?
It’s no secret that the tech industry has been struggling for months. In 2022, hundreds of companies in the tech industry have laid off. Meta’s layoffs were one of the eye-popping headlines, with more than 11,000 employees out of work.
Tech layoffs are likely to continue into 2023. Earlier this month, Amazon and Microsoft announced layoffs of about 28,000 employees in total.
Here’s a breakdown of the layoffs for both companies, what it means for tech investors, and how Q.ai can help.
Microsoft layoffs
On January 18th, Microsoft CEO Satya Nadella announced significant job cuts at the company. In a statement, Nadella said, “Today, we are making changes that will reduce his overall workforce by 10,000 jobs by the end of the third quarter of fiscal year 2023. This is less than 5% of his total employee base. Yes, and there are several notifications being made today.”
Nadella continues. We know this is a difficult time for each affected individual. The Senior Leadership Team and I are committed to conducting this process in the most discreet and transparent manner possible. ”
Interestingly, Microsoft mentions hiring employees in certain areas. Earlier this month, Nadella warned in his interview with CNBC-TV18 that the next two years will be difficult times for the tech sector.
Amazon layoffs
Microsoft is laying off about 10,000 people, while Amazon is laying off a staggering total of 18,000 people. This total includes layoffs in November 2022. The reduction equates to approximately 6% of Amazon’s workforce.
According to Andy Jassy’s memo to Amazon employees, many teams have been affected. However, most of the removed roles are related to the Amazon store and his PXT division.
In the memo, Jassy said, “Amazon has weathered uncertain and difficult economies in the past, and will continue to do so. These changes will allow us to pursue long-term opportunities with a stronger cost structure.” But I’m also optimistic that we’ll be creative, resourceful, and crafty at a time when we’re not hiring on a large scale or excluding some roles. Long-lasting companies go through different stages, they are not in heavy people expansion mode every year.”
Technician Layoffs: Reasons
By 2023, it is estimated that about 174 tech companies will already lay off more than 56,000 employees. However, the latest wave of layoffs is a continuation of a string of layoffs that have occurred throughout 2022.
These layoffs are evidence of a struggling tech industry. But why is the tech sector in trouble? Here’s a look at some of the reasons behind historic layoffs.
Need for pivot
The technology industry is constantly changing. That’s the nature of companies working with ever-evolving technology. Some are left behind as the company grows towards new technologies.
Even Microsoft’s CEO has pointed out that the company will continue to hire in key areas. In other words, the company is pouring resources into new technologies that may prove beneficial in the long term.
As technology advances, some layoffs at major tech companies are an inevitable part of progress.
uncertain economic times
The economy was far from stable last year. It’s a good time to tighten your belts as households and businesses prepare for a recession. Households can spend less by spending less, but businesses often introduce layoffs to cut expenses.
While layoffs don’t make anyone happy, the move may be what the company needs to survive. With fewer jobs to support, businesses can keep moving forward regardless of economic storm clouds.
Are layoffs bad for investors?
People’s instinctive reaction to headlines about layoffs is negative, but layoffs aren’t necessarily a sign of doom for the tech industry. Instead, the industry will likely continue to change as it pushes the boundaries of technology forward.
Individual companies can be winners or losers, but technology can remain a worthwhile investment for many portfolios. The main challenge is determining which companies come out on top. Of course, it’s impossible to predict the future, but careful monitoring of the market may point you to the right portfolio choices.
If you’re not up to the challenge of regularly monitoring all things tech, no problem. Harness the power of artificial intelligence (AI) to monitor the market. Q.ai allows you to add investment kits to your portfolio.
When choosing an investment kit, Q.ai monitors the changing market. As conditions change in the technology industry, Q.ai will make appropriate changes to its portfolio to maintain its objectives and risk tolerance. If you’re interested in technology, consider adding the Emerging Tech Kit to your portfolio.
Conclusion
The latest Microsoft and Amazon layoffs will put thousands of engineers out of work. The numbers are eye-popping, but layoffs don’t mean disaster for the tech sector. increase.
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