Why are tech companies laying off so many employees?

We can say that there is no technology company that does not lay off workers...


Layoffs are sweeping the tech industry. It started with small and growing companies that need to keep a close eye on their spending, and has spread to tech giants like Google, Meta, Amazon and Microsoft. So much so that it will probably be faster to list the tech companies that are not laying off workers. In fact, the wave of layoffs that has gripped tech companies has led to the emergence of a website that tracks layoffs in the sector. But why is all this happening? Why are so many companies in the tech sector (even those still making good profits) laying off so many people? There are reasons specific to each company, of course, but let's take a look at a few big themes affecting Silicon Valley and beyond... Pandemic hiring spree According to an article in Forbes, this massive wave of layoffs is in many ways correcting a previous 'mistake'.
During the pandemic, our online lives have sadly become our only lives. There was no commuting to and from the office, no stopping by the bar on Saturday nights, no playing soccer, going to a concert or dancing in a club. We all had to stay at home and therefore spent much more time online. Online shopping is not only a growing market, it has become the only option. Netflix, Amazon Prime and countless other streaming services have replaced not only the cinema, but also nights in restaurants, lunch breaks during the working day and date nights.

Tech companies expected this change to be permanent, so they hired accordingly. They expanded their teams, created new ones and grew very fast. This is compounded by the fact that large companies need 'replacement staff'. So what does this mean? Let's stop here and open a parenthesis: If a team at Meta, for example, needs 25 staff to keep the application they are working on up and running, they need to have 30 or more people on the team. This is a precautionary measure that protects the company in case some key staff leave. This method, common in the tech sector, means that many companies are probably hiring more people than they need.

"New Truth" after Covid

Evet, evden çalışma çok daha kabul gören bir uygulama haline geldi; artık birçok ofis çalışanı evden çalışmanın avantajlarından yararlanıyor. Ancak hibrit çalışma çok daha popüler hale geldi. Birçok çalışan (ve işveren) fikir paylaşmak ve bir şirket kültürü oluşturmak için ofiste biraz da olsa zaman geçirmek istiyor.
Zoom ve Google Meet gibi teknolojiler hâlâ yaygın olarak kullanılıyor olsa da dünya (hemen hemen) normale döndüğünden beri, tüm toplantıların çevrimiçi yapıldığı günleri geride bıraktık.
Ofis dışındaki yaşam ise bir çok açıdan neredeyse pandemi öncesindeki gibi. Barlar ve restoranlar yeniden doldu, hafta sonu sporları başladı ve elbette tatiller geri döndü. İnsanların iki yıllık uzun bir aradan sonra böyle şeylere daha fazla ilgi duyması doğal.
Peki teknoloji cephesinde ne oldu? Şirketler gerçekten çok fazla insanı işe aldı. Ve bu kişiler sıradan personel değil, son derece deneyimli yazılım mühendisleri ve geliştiricilerdi. Cömert yan haklar, tesisler ve hatta paketin bir parçası olan hisse senedi seçeneklerinden bahsetmiyoruz bile. Yukarıda değindiğimiz ‘yedek personel’ yöntemi, belli bir düzeyde daha fazla personel istihdamı gerektiriyor ancak birçok şirketin bu işi abarttığı ve çok ileri gittiği düşünülüyor.

So what do the experts say?

According to the New York Times, low interest rates were the hidden engine that fueled $1 billion start-ups and virtual ventures aiming to conquer the world. But in 2023, things changed and that era came to an abrupt end. Money is no longer 'almost' free. According to experts, 'cheap money' has funded most of the acquisitions that have replaced organic growth in tech. Sam Abuelsamid, principal analyst at Guidehouse Insights, said: "The entire tech industry of the last 15 years was built on cheap money. Now they're facing a new reality, and they're going to pay the price." "High interest rates are painful for almost everyone, but especially for Silicon Valley," says Kairong Xiao, a finance professor at Columbia Business School: "Unless the Fed reverses tightening, I expect more layoffs and investment cuts."

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