Tech Layoffs Reach a Staggering 727% YoY Increase in March 2023

At BanklessTimes.com we have analysed data to reveal the major tech companies laying off staff in March 2023. March isn’t yet over and already two of the world’s largest tech firms have announced significant layoffs. Meta is to let go 10,000 of its employees, while Amazon is not far behind with 9,000 worker redundancies.

Meta’s announcement heralds the second round of mass layoffs for the company in the space of less than six months, following close on the heels of the November 2022 cut-back, which saw the tech giant eliminate more than 11,000 jobs – a very substantial slice of its global workforce (13%). Last year’s cuts had been anticipated for some time as part of a restructuring process, which will also see Meta scrap growth plans involving 5,000 new openings, kill off lower priority projects, and flatten layers of middle management.

The current layoffs, however, cut deeper and faster than expected, and appear to be following Meta’s plans for a “Year of Efficiency”. While the recruiting team has already found itself impacted, it will be a worrying time for workers in the tech team and the business group, with the restructurings and layoffs that affect these teams to be announced in April and May respectively.

The developments in recent months represent a significant change of course for the social media giant, which has historically been seen as a safe employer, with no material redundancies in recent years.

While layoffs on this scale are very unfortunate on a human level, Meta remains optimistic and upbeat about the future. In a speech to his employees, Mark Zuckerberg announced “Since we reduced our workforce last year, one surprising result is that many things have gone faster. In retrospect, I underestimated the indirect costs of lower priority projects”.

Indeed with shares in Meta jumping by 6% after the news was announced, the restructuring appears to have been construed as a positive thing by the markets.

Amazon has not fared nearly as well, however, seeing its shares fall by 1% when its 9,000 layoffs were announced on 20 March. These latest redundancies follow even more sizeable ones that ran from November 2022 to January 2023, with this first round affecting more than 18,000 employees, primarily those working in the retail, devices, recruiting and human resources groups. The targets of the latest cut-backs are those in the cloud computing, advertising and Twitch divisions, signalling headcount reductions across the board.

Amazon’s decision to lay off more employees is the latest in an ongoing push to streamline costs, as well as to hedge against the risks presented by the current economic downturn. As CEO Dan Jassy said, Amazon has had to pay some regard to “the uncertainty that exists in the future”.

Like Meta, Amazon has been a very stable employer in recent years, with no significant redundancies until now.

Layoffs.fyi has been charting tech redundancies since the Covid-19 pandemic and has been finding that headcount cuts are becoming increasingly common across all sectors of the industry. Part of the reason for this may well have been over-exuberance during the pandemic years, with Mark Zuckerberg himself admitting that he had hired too fast over that period, while Amazon also went on a pandemic hiring spree adding 427,300 workers in just ten months.

Meta and Amazon are not the only household name brands to find themselves struggling in recent months. In January, Alphabet, the parent company of search-engine Google, announced its biggest series of post-pandemic layoffs, cutting 12,000 jobs, representing 6% of the tech giant’s total workforce.

So far in 2023, we have already seen 528 tech companies announce layoffs, and sadly in the current climate of economic uncertainty and cost pressure, it seems inevitable that redundancies in the industry will continue well into the next few months, and that the pinch is being felt across the globe.

As our table below illustrates, it is not only the US-based giants that are having to cut staff, but also major tech companies the world over:

It is difficult to identify with real accuracy the total number of workers being laid off each month (as some companies choose not to disclose those numbers) and in any event layoffs at large companies can skew data for individual months. Instead and in order to illustrate the trend more accurately, we have looked at the number of tech companies making layoffs in March 2023, compared with March 2022 and March 2021. The pattern that emerges is very stark, with a 175% YoY increase from 2021 to 2022 and a staggering 727% YoY increase from 2022 to 2023.

When we think of redundancies we often think of corporate insolvencies, but what I think is unusual here is that Amazon, Meta and Google are all highly successful companies still turning enormous profits. This must be a worrying time for anyone employed in the tech industry, because even those in flourishing businesses cannot necessarily count on job security.

Jonathan Merry, CEO of BanklessTimes.com

There is, however, one big tech company that appears to be faring better than others and where jobs are looking a little safer. Apple, which took a more measured approach to hiring during the pandemic years (growing its staff by just 20%, markedly less than some of its peers) has not announced any layoffs. In October 2022 the company implemented a hiring freeze in order to reduce budgetary pressures, but thus far jobs have remained safe.

While over-hiring during the pandemic is undoubtedly part of the reason for the current layoffs – as admitted by CEOs ranging from Meta’s Mark Zuckerburg to Salesforce’s Marc Benioff – it is not the only one. It would seem that many tech companies failed to foresee demand for their products cooling following the ease of pandemic restrictions, as well as the economic headwinds that have emerged over the past 12 months, with a flourishing cost of living crisis and the return of war to European soil. While unfortunate, they can perhaps be forgiven for failing to see that which none of us could have imagined at the turn of 2022.