Tech layoffs are soaring this month
November is shaping up to be a brutal month for tech layoffs — and we’re only halfway through.
Driving the news: Amazon is gearing up to lay off about 10,000 employees, the largest reduction to its headcount in the company's history (though a teeny fraction of its 1 million employees), the New York Times reports.
Why it matters: Unemployment overall is low, but you wouldn't feel that way if you worked in tech — or the mortgage industry. These are the sectors feeling the most pain from the Fed's rate hikes.
- Many of these companies were buoyed by low rates, skyrocketing equity values, and an overly optimistic view of the future — one in which we conduct meetings, legless, in the metaverse, while furiously pedaling with our actual legs on our Pelotons.
- Plus: A hyped-up "war for talent" led some companies to hire too fast and spend too much. Some of that hiring was "sloppy," one recruiter told Axios.
- It was only a few months ago that Amazon raised its maximum base pay level for these corporate employees to $350,000 a year, from $160,000, amid a fever-pitch drive to hire throughout the sector.
Details: The Amazon layoffs will be focused on those in corporate roles, including people working on Amazon devices, its retail division and human resources, according to Karen Weise's reporting in NYT.
- Amazon did not respond to a request from Axios to confirm the report.
- Growth has slowed in Amazon's core retail and cloud-computing businesses. Last week, the WSJ reported that the company was launching a "cost-cutting review," and that its device division was hemorrhaging money.
The big picture: The tech industry layoffs will likely mean huge changes culturally in a sector known for well-paying roles with lush perks at companies pitching endless growth.
- For many of these companies, this is the first time they're going through layoffs. "It just fundamentally changes the culture of the people who remain," said Axios chief technology correspondent Ina Fried on Monday's episode of the "Axios Today" podcast.
- Meta's layoffs make up nearly half of the 23,000 firings thus far tallied in November.
- The chart above doesn't include the potential Amazon cuts. If those happen, November will see more than 32,000 tech workers let go, easily surpassing the prior peak in Lee's data — 27,000 in April 2020, a time of historically high unemployment.
- More than 120,000 tech workers have been laid off so far in 2022, eclipsing the total from all of 2020.
- Other companies cutting staff this month: Twitter (3,700 laid off, per Lee's tracker), Salesforce (1,000), Stripe (1,000), Lyft (700), Redfin (850), Opendoor (550) and Zendesk (350).
Zoom out: While other industries aren't seeing cuts like these, there are signs of rising anxiety among those who are still employed.
- Job seeker confidence is down significantly from earlier in the year, according to an index published by ZipRecruiter.
What to watch: Crypto has already seen big cuts this year, but more are surely on the way in the wake of the FTX debacle.