Amazon’s Massive Job Cuts Hint at More Pain for Tech Sector in 2023 Amid Recession Fears
The massive job losses that have been announced by Amazon which is among the largest companies owned by private individuals in the US and the world, demonstrate that the mass layoffs that are taking over the tech sector may last to 2023 as companies scramble to cut costs, experts have said on Thursday.
A surge in demand during the pandemic quickly turns into recession, tech companies cut more than 150,000 employees by 2022, according to the tracking website Layoffs.fyi which is rising as growth rates in the largest economies of the world slows down.
“More layoffs are definitely likely … considering the magnitude of the investment we saw in the 2020-21 timeframe I would guess that some level of caution is likely to be acceptable,” said Russ Mould the director of investment for AJ Bell.
Technology majors Microsoft along with Google, the parent company of Alphabet have suggested cost cuts, which could include the possibility of layoffs.
Salesforce the top executive Marc Benioff said on Wednesday Salesforce, the software giant for enterprise, has recruited “too many employees” when he announced plans to reduce 10% of its jobs.
Amazon: For Amazon its cloud unit, the the growth of its cloud division which is responsible for the majority of its revenue has been diminished as businesses have cut back spending. Meanwhile, its online retail business is suffering from budget cuts for consumers because of rising costs.
The current crisis is bringing memories of the dot-com bubble that erupted at the beginning of the century as well as that 2008 crisis in the financial market, when many thousands of people lost their jobs.
“Some among us may be able to recall the years 2000-2003 as an enormous bubble fueled by cheap money, high investors expectations, and plenty of money,” Mould said. Mould. “Whether we witness a repeat in the future or not is intriguing as there’s an opportunity for that.”