Amazon, Google, Microsoft and other tech companies have been on a layoff spree this month, with the latest cuts differing from last year’s mass reductions.
Their worlds did not stop. Not only that, the companies were rewarded. Their stock prices soared. Some divisions were more productive. And the companies — including X, formerly known as Twitter, which has chopped nearly 80 percent of its staff since late 2022 — continued operating.
Other chief executives took notice. And a month into 2024, tech companies have entered a new phase of cost cutting.
After last year’s widespread layoffs, the largest firms — including Amazon, Google and Microsoft — have in recent weeks made smaller, targeted job trims while focusing on fewer projects and shifting resources to key products such as artificial intelligence. Some tech start-ups — such as Flexport, Bolt and Brex — have slashed more deeply to stave off potential extinction. The mandate from the top is the same: Do more with less.
“There are three basic buckets of layoffs we’re seeing,” said Nabeel Hyatt, a general partner at the venture capital firm Spark Capital, which invests in tech companies. “Big, fat tech oligopolies looking for more growth and profit; there are the medium-size companies that over-hired during boom times; and there are the smaller start-ups that are just trying to gain runway to survive.”
The new layoffs are the latest correction to years of a booming global economy and near-zero interest rates, which gave tech companies the ability to throw off gobs of cash to attract top talent in the pandemic. Many of the companies hired tens of thousands of new workers during that time to keep up with digital demand.