Over the past few years, many technology companies have slammed the brakes on hiring or slashed positions, often in significant ways. And this isn’t a fluke — these are consistent trends that have emerged since the COVID-19 pandemic slowed the economy and forced companies to reduce their headcount.
The tech layoffs have impacted not only the affected employees and their families, but the overall job market as well. The number of jobs available in the tech industry has dropped significantly, and job satisfaction among tech workers is at an all-time low.
Those who are most at risk of being laid off tend to be entry-level or contract workers, as well as teams like marketing, HR, and admin. Seniority and tenure levels also play a role in layoffs, as companies may favor more experienced staff when making these cuts.
But the majority of large and publicly-traded tech companies slashing their workforce aren’t doing so out of dire necessity or financial peril. Despite the recent stock market correction and slowdown in consumer spending, most of these companies have plenty of cash on hand. And in many cases, the job-shedding is a result of strategic decisions aimed at improving a company’s future prospects.
These strategies can include cutting non-essential roles, reducing the size of management teams, and eliminating underperforming products or services. The most common goal is to improve the profitability of the company by reducing operating expenses and increasing revenue. This is especially important as the market continues to erode and consumers rein in spending.