The tech industry has been experiencing a wave of layoffs that has impacted over 330,000 workers since 2022, with analysts predicting more to come. Despite the traditional corporate culture of avoiding layoffs, companies are facing economic challenges that may require further downsizing to maintain profitability.
Jamie MacEwan, a senior media analyst at Enders Analysis, stated that decision-makers at these companies may have forgotten that the period of trend-busting growth and cheap money would not last forever. As companies monitor the economy and profitability, further layoffs may be necessary.
According to analysts at Jefferies, Google may be a prime candidate for additional layoffs, as the company needs to refocus on its core business, similar to Meta. By pulling back on non-core roles and focusing on core business drivers such as Ads and AI, Google could set itself up to take a larger share of the market.
Oppenheimer has similarly singled out Amazon, stating that “more layoffs are necessary” for the company to return to its past profitability. While it remains to be seen whether tech companies will lay off more employees, it seems likely given the current economic climate. Companies may need to prioritize their core businesses and make difficult decisions to maintain profitability in the face of economic challenges.