Tech Jobs Lost – Industry Struggles
The trend of layoffs doesn’t just persist in the social media industry. Layoffs are occurring across the economy, but on Thursday it felt like the tech industry was getting hit the most. The tech industry in terms of jobs has been struggling for the last few months, and the situation worsened. Lyft laid off almost 700 employees, or 13 percent of their workforce, and Stripe laid off 14 percent of their workforce in what were deemed cost-cutting moves to help invest in parts of the business they feel are necessary. Hiring is no longer an issue, but the current economic picture requires these businesses to adapt.
Amazon, the king of tech, also announced that they were going to temporarily halt hiring for a few months in an effort to readjust their payrolls. Jobs in these companies steadily grew during the pandemic, but it looks like it might’ve been too much as productivity is slipping and resources aren’t being used as efficiently. Keeping labor levels where they are would allow companies to chase ambitious, risky projects that would help grow and expand the business. However, tech companies are choosing not to do that because their analysis shows that projects would be hurt by teetering consumer demand caused by inflation. Additionally, the current high-rate environment is extremely stressful on tech companies, incentivizing them to save money. This all shapes up to make an interesting jobs report not only today, but in the future months as unemployment should rise if these workers aren’t able to find new jobs. Economists expect layoffs to continue to happen, and maybe this is just what the Federal Reserve wants.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.