There is a sharp wind of job cuts in big tech companies in the U.S. This is because information technology (IT) companies have increased their workforce as they expanded their services during the pandemic, but they have recently begun to tighten their belts as their performance has worsened and the economic recession is expected. CNBC reported on the 18th (local time) that the number of layoffs announced in the U.S. IT industry from last year to now is more than 60,000.
According to economic media such as the Wall Street Journal (WSJ), Microsoft CEO Satya Nadella said on a blog that she plans to fire 10,000 people, or 5% of the 200,000 employees this year.
Microsoft also cut its workforce in July and October last year, but did not disclose the size of the reduction at the time. WSJ estimated that it would have cut about 1% of all employees last year.
CEO Nadella explained the background of the workforce reduction, saying, “Some parts of the world have entered a recession, and others are also expected to suffer an economic recession.” Industries predict that Microsoft’s fourth-quarter earnings, which will be announced on the 24th, will fall short of market forecasts. Microsoft’s sales in the third quarter of last year increased by 11% compared to the previous year, but its net profit fell by 14% year-on-year.
Andy Jash, CEO of Amazon, a leading U.S. big tech company, also said in a notice to employees posted on the company’s website earlier this month that he would lay off 18,000 people. This is the largest in Amazon’s history. When Amazon announced in November last year that it would start restructuring its device business, recruitment, and retail sectors, the industry predicted the size of the job cuts to about 10,000 people, but layoffs are double that.
The situation is no different for other big tech companies. Google has yet to announce a company-wide layoff, but Bailey, Alphabet’s life science subsidiary, recently announced that it will cut 200 jobs, or about 15% of its total workforce. Meta (formerly Facebook) has already laid off 11,000 employees, or 13% of its total employees, in November last year. However, as performance is expected to be sluggish, the possibility of further restructuring this year is being mentioned. Twitter has also fired 3,700 people, or half of its total employees, since Tesla CEO Elon Musk took over Twitter.
However, among big tech companies, Apple has yet to announce its plan to cut jobs. Apple is expected to perform poorly in the fourth quarter of last year as its largest partner Foxconn’s Chinese plant failed to operate properly in the aftermath of COVID-19, but it says it has no plans to fire large-scale. This is because Apple did not significantly increase employment even during the pandemic.