What's with all the layoffs?

What’s with all the layoffs?

According to Layoffs.fyi, 1,186 technology companies laid off 262,582 employees in 2023. And that number has already reached 42,324 at the time of writing (Feb 23rd 2024) - including from the likes of Amazon, Docusign and Snap. It seemed like every week in 2023, there was another tech company announcing that they will be laying-off a sizeable percentage of their workforce and this trend doesn’t seem like its stopping as we move into 2024.

But why is this happening? A favourite excuse of big tech CEO’s for these layoffs tends to be for ‘efficiencies’, with many pointing towards the emergence of AI as an increasingly cited factor as well as a more challenging economic environment. Of course, CEO’s will point to these factors rather than admit that they over-hired in a period of hyper-growth in the tech industry post COVID-19 and are now trying to fix these mistakes by cutting staff.

The truth: well, there are multiple factors leading to all of these layoffs. Some of these reasons are down to poor decisions from leadership but also some factors that may* have been out of their control, such as sustained high inflation, the economic downturn and rising interest rates (one could argue that it is the job of a leader to foresee these changes).

How are people reacting to these company announcements?

By now, we imagine most of you have seen the TikTok video of a woman being laid off by Cloudfare that went viral a couple of weeks ago. If you haven’t, we have linked it below. It’s hard to not feel sorry for everyone in this clip. The woman who recording the video was clearly distraught by the whole experience and the people firing her clearly could not give her any information on the so-called “performance” metrics that she wasn’t hitting (the reason she was being fired, apparently).

You can also feel sorry for the people on the other side of the video, it must be quite a difficult job to fire someone without giving them any clarity as to why they’re being let go. These people have clearly just been given orders by their superiors to carry out these lay-offs, leaving them in a really difficult position. In short, it is hard to blame the people on the other end of this call - they’re just following orders. It’s the leadership above them who are at fault.

Why is the former Nintendo CEO trending online?

A couple of weeks ago, former Nintendo CEO, Satoru Iwata (who sadly died too soon in 2015) began trending online. Back in 2013, he took a 50% pay cut while some other Nintendo executives took a 20% hit to their salaries when the company was struggling financially. Speaking about this decision, Iwata commented:

“If we reduce the number of employees for better short-term financial results, employee morale will decrease. I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world”.

So in this current lay-off season, CEO’s may consider taking inspiration from Iwata before laying-off their staff? Just a thought.

What else is going on in the world of tech?

The Neuralink Chip ‘can control a human mouse just by thinking’, according to everyones favourite tech billionaire and founder of Neuralink, Elon Musk.

Singapore announces $740 million AI investment over the next five years. The aim of this investment is to strengthen the country’s position as a leader for business and innovation.

Nvidia is now Wall Street’s most traded stock. The chipmaker has overtaken Tesla after its incredible rally throughout 2023 and 2024, increasing over 200% in that period.