5 Reasons Behind Layoffs of Thousands of Google Employees to Microsoft


Tech giants from Meta, Twitter, Microsoft, Google, Amazon and most recently IBM are busy laying off thousands of employees. As quoted by us from Business Today, here are 5 reasons behind it:

1. Hiring redundant employees

The Corona pandemic has forced many technology companies to recruit employees because several finished products are widely used and more people are needed. For example, Google Meet became one of the most widely used video calling platforms for online meetings at that time.

So new employees were recruited, from developers to Product Managers. But now the situation is different. "In the past 2 years we've seen dramatic growth. To compensate, we're hiring people in a different economic reality than we face today," said Google CEO, Sundar Pichai.

2. Investor pressure

Technology company investors certainly have an interest in the company's continued success. So they asked for efficiency in the midst of slowing growth. For example last October, Meta CEO Mark Zuckerberg received a letter from Altimeter Capital Chair Brad Gerstner, suggesting layoffs and streamlining operations.

"Like many other companies in the world, Meta has too many people, too many ideas, too little urgency," the letter read. As a result, Meta actually laid off thousands of employees.

3. Stagnant growth

The technology sector has grown fast over the past 3 decades. So according to experts, layoffs indicate that the era is beginning to end. "We've seen at Amazon, Apple, Microsoft and others that it's almost over after its very fast growth and now they're laying off. This is the rationale for dealing with slower growth," said market analyst Dan Ives.

Satya Nadela agreed after announcing the layoffs of 10,000 Microsoft employees. "We are experiencing a period of significant change. Customers accelerated their digital purchases during the pandemic, now they are optimizing digital purchases to do more with less assets," he said.

4. New investments fail

Tech companies invest in new technology with lots of money, but sometimes they fail or see no results. For example, Meta, they spent billions of dollars to develop the metaverse virtual world, but they haven't been interested in people yet.

By 2022, Meta's metaverse business will lose up to USD 9.4 billion. Burning money, slowing growth and declining stock prices then forced Meta to make efficiencies, including by laying off employees.

5. Anticipate an economic recession

The economic conditions in various countries are currently not good, even leading to a recession. "We're watching organizations in every industry and geography be cautious as some parts of the world are in a recession and other parts are anticipating it," wrote Microsoft CEO Satya Nadella.

Experts believe that there will be more layoffs, especially given the economic downturn. "I think the next 6 to 9 months are going to be difficult as a recession is imminent. I think this dark storm will pass but these tech companies cannot be avoided," said Dan Ives.

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