The wave of tens of thousands of layoffs at big tech companies is largely a miscalculation.
The same companies that are now announcing, with rueful messages, that they are laying off their workers have just hired new employees at an unprecedented rate in recent years.
Only Amazon, Alphabet (Google), Microsoft, Meta and Apple - the
big tech
, the five technological giants - increased their payroll by one million people in the last three years.
Now they have announced the dismissal of more than 50,000 people.
The only one that has not joined -for now- the tsunami of cuts is Apple.
“We hire for a different economic reality than the one we face today,” Sundar Pichai, the CEO of Google, acknowledged in his message to the staff, announcing the cut of 12,000 jobs.
It is true that the economic situation has deteriorated, but the labor market in the United States is more vigorous than ever, with an unemployment rate at 3.5%, which is equal to the minimum of the last 50 years.
Where the "economic reality" has changed the most is that the strong demand for products and services from technology companies that occurred with the pandemic, confinement, the change in consumer habits and widespread teleworking has declined with the progressive back to normal.
Technology companies have found themselves with revenues that no longer grow at the rate they expected and with costs that have.
In some of these giants, profit has started to fall sharply.
The battle to get engineers, technicians and programmers in Silicon Valley also caused salaries to skyrocket.
Now, for those who lose their jobs with these or other profiles (human resources,
marketing
...) the problem is that all companies are laying off at the same time.
The case of each company is different, but the common denominator is an unprecedented increase in staff in recent years, according to the figures consulted by EL PAÍS in its annual and quarterly reports.
In five years, the five technology giants have gone from having 926,000 employees in 2017 to more than two million in 2022, in the absence of any of them publishing their exact year-end figures.
The Amazon Factor
The total is highly marked by the expansion of Amazon, whose employment profile, on the other hand, is very different from the rest.
It had 566,000 workers in 2017;
798,000, at the end of 2019, just before the pandemic;
and closed 2021 with 1,608,000 employees.
The latest figure published by the company is 1,544,000 workers as of September 30, 2022, but given the seasonality of the company, that still represented a year-on-year increase of 76,000 jobs.
The 18,000 layoffs represent just over 1% of its workforce, although they represent the largest workforce cut in the history of companies in the sector.
The case of the firm founded by Jeff Bezos is peculiar, because Amazon has undertaken a major international expansion and because most of its staff are not technological workers but logistics workers.
But the hiring fever has also occurred in the rest of the
big tech
.
Meta broke the fire of the massive layoffs with the announcement of a cut of 11,000 jobs.
But the company that Mark Zuckerberg founded and runs has raised its payroll from 25,000 workers in 2017 to 87,314 in the third quarter of last year.
In the last three years, the company has practically doubled the number of 45,000 employees with which it arrived at the pandemic.
Alphabet, the Google group, has more than doubled its workforce in the last five years, from 88,000 employees in 2017 to 186,779 on September 30.
Hiring had also accelerated during the pandemic, as the company has added 68,000 positions since the end of 2019. Now, the company has announced 12,000 layoffs, 6% of its workforce.
Microsoft has also increased its payroll by 77,000 people in three years and by 97,000 since 2017, up to the 221,000 employees with which it closed its last fiscal quarter.
The company that Satya Nadella runs has announced a cut of 10,000 jobs, 5% of its workforce.
Apple is the only one of the Big Five tech giants that hasn't announced mass layoffs.
It has reined in hiring (and fired recruiters) and made some minor adjustments, but for now it has been sidelined by the record-high cuts of the other four groups.
The group led by Tim Cook is the one that has been the most restrained in hiring.
The workforce has increased in the last three years by 27,000 people, up to the 164,000 with which it closed its fiscal year 2022. Although this represents a not inconsiderable increase of 20%, it is far from Microsoft's 53%, Alphabet's 57% , 84% of Meta or more than 100% of Amazon.
The big five tech companies have almost doubled their workforce in three years.
A small part of that increase has been from the acquisition of other companies.
"I was wrong"
The top executives of the technology giants have admitted that this acceleration in hiring, mixed with a change in economic trend and a slowdown in demand for their services, has choked them.
"This year's review has been more difficult given the uncertainty of the economy and that we have hired quickly in recent years," began the message in which Andy Jassy, Amazon CEO, announced the workforce cut.
“Just as we saw customers accelerate their digital spend during the pandemic, we are now seeing them optimize their digital spend to do more with less,” admitted Microsoft's Satya Nadella.
Mark Zuckerberg has been the one who has intoned a more complete
mea culpa
: “At the beginning of the covid, the increase in e-commerce led to an enormous growth in revenue.
Many people predicted that this permanent acceleration would continue even after the pandemic ended.
I did too, so I made the decision to significantly increase our investments.
Unfortunately, this did not go as expected, ”said the founder and chief executive of Meta in his message to the staff.
“I was wrong and I take responsibility for it,” he added.
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