Big Tech is still suffering as giants Microsoft and Amazon announce layoffs.
- At the beginning of the year, Amazon announced its largest-ever round of company layoffs. Around 18,000 workers in the global company will be released.
- Fellow tech company Microsoft announced this week that it would be laying off approximately 10,000 employees.
- Amazon is dealing with slowing sales following rapid growth during the pandemic. The online retailer expanded rapidly during the pandemic but now seems to be struggling to maintain the massive infrastructure.
- Microsoft will be reducing staff in both the human resources and engineering departments.
Why it’s news
Recent layoffs in the tech sector indicate that the tech layoffs seen in 2022 could continue into 2023. Tech companies enjoyed a boom during the pandemic but are now beginning to feel the pressure from investors as sales decline.
In addition to laying off employees, several tech companies are looking into other cost-saving measures, such as slowing hiring and growth in other areas. In November alone, tech companies announced 52,771 planned layoffs, Bloomberg reports.
Though Amazon’s layoffs are some of the largest the company has ever announced, it still represents a small number of the company’s overall workforce.
Backing up a bit
While shoppers were locked inside during the pandemic, Amazon’s warehouses popped up across the country, but now that sales have slowed, those warehouses are closing.
Amazon’s explosive growth could leave the company floundering, according to experts at supply-chain consulting company MWPVL International. The firm suggests that it will take nearly three years for Amazon to recover from such rapid expansion. Amazon disagreed with this assessment.
The drop-off in warehouse expansions began last year as economic uncertainty cut into consumer spending. Amazon began shutting down or canceling warehouse expansions and announced employee layoffs. This week, Amazon CEO Andy Jassy announced 18,000 workers will be laid off.
Even with this slowdown, Amazon’s growth is still rapid compared to other giants like Walmart. Walmart’s total warehouse capacity is estimated at around 150 million square feet.