Silicon Valley’s workforce is rapidly contracting.
Amazon is planning to lay off 10,000 employees amid ongoing fears of an economic recession, according to a new report from The New York Times. The news comes just days after Facebook parent company Meta announced 11,000 layoffs and Twitter, embroiled in controversy since Elon Musk took over the company, laid off 3,700 full-time employees (nearly half the company) along with 4,400 contractors.
These companies are not alone. With high inflation and rising interest rates, major tech companies have laid off more than 23,000 people in total over the past 30 days. The Amazon layoffs would push that number to 33,000.
In recent weeks the hard drive maker Seagate laid off 3,200 employees, and Microsoft, Stripe, and Salesforce each laid off about 1,000 employees. Lyft, Peloton, and Dapper Labs—darlings of the gig economy, pandemic economy, and crypto boom respectively—all cut their workforces by double-digit percentages
But Silicon Valley’s collective downsizing didn’t start in October or even this quarter. The entire year has been a tough one for tech workers. Bloomberg reports that 104,000 tech workers lost their jobs in 2022, compared to 80,000 who lost their jobs in 2020. This year, Coinbase, Snap, and Shopify each laid off 1,000 employees; Netflix laid off 450; Robinhood laid off a quarter of its staff; and Tesla cut one-tenth of its workforce.
There are many factors contributing to the mass layoffs in the tech sector, said J.P. Gownder, principal analyst at the market research firm Forrester. “Widespread economic concerns—some prompted by rising interest rates, others by the war in Ukraine, high fuel costs, and supply chain issues—are prompting these moves in anticipation of lower demand,” he said.
More cuts to tech jobs are coming. The US chipmaker Intel plans to lay off thousands of workers before the end of the year and the crypto firm Galaxy Digital is considering laying off more than 20% of its workforce. Gownder added he wouldn’t be surprised to see more layoffs in the remaining months of 2022: “They want to set up finances for success in 2023.”