The US is witnessing a massive wave of large companies, in many industries and professions, laying off employees. At the forefront are technology companies, where more than 150,000 people in this field have lost their jobs recently. Alphabet Inc., the parent company of Google, announced plans to cut 12,000 jobs. This is one of Alphabet's efforts to reform the technology sector.
Meanwhile, Microsoft announced plans to cut 10,000 jobs by the end of the third quarter of fiscal 2023. Following in the footsteps of US companies, technology companies in Southeast Asia such as GoTo Group and Carousell, are also conducting rounds of layoffs when business operations are difficult.
The wave of job cuts in many technology companies started in the fourth quarter of 2022, lasted until now and is expected to continue in the near future. Persistent inflation has made the economic outlook gloomy, investors become more pessimistic about the path to the profit of technology companies. Tech giants (Big Tech) have won big during the COVID-19 pandemic.
But now, when the epidemic is under control and normal activities have been resumed, the demand for digital services has plummeted. The massive recruitment of personnel by Big Tech, during the peak period, was also the reason why they had to cut a series of jobs, to reduce costs when business situations were not positive and the world economy is still volatile.
The plan to cut staff on a large scale will certainly affect the lives of many workers. According to some US officials, as the wave of labour surplus spreads across technology companies, many people who have lost their jobs are staying in the US on H-1B visas (non-immigrant visas).
Therefore, these officials are calling on US immigration authorities, to at least double the 60-day period that foreign workers on work visas are currently allowed to stay in the US so that they can have more time to look for a new job. Meanwhile, lawyers warned that the US economy will be affected if highly skilled immigrant workers in the technology sector leave the country.
Business activities of technology corporations have been relatively bleak lately. Specifically, the two “giants” in the technology industry, Google and Apple, had poor business results in the last quarter of 2022. Alphabet's revenue was 76 billion USD, of which profit reached 13.6 billion USD, all lower than the same period in 2021.
Revenue from advertising, one of Google's key businesses, has plummeted. According to Apple's report, its revenue in the last three months of 2022 reached 117.1 billion USD, down 5.4% from a year ago. Media giant Meta's 2022 revenue fell 1% to 116.6 billion USD, marking the first time the company's revenue has declined. Google CEO Sundar Pichai admitted, that after a period of significant acceleration in digital spending amid the pandemic, the macroeconomic environment is now more difficult.
Not to mention that the pressure on Big Tech is also increasing, when a series of countries tighten their management with technology platforms. Many technology companies have faced criticism for not monitoring their platforms carefully, leading to violations in the internet environment.
Laying off employees is part of the “austerity” policy of technology companies. In the context of the global economy with many potential risks, technology companies will inevitably face difficulties, requiring proactive adaptation and more cautious steps in implementing business strategies.