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Why are Big Tech Companies Laying Off So Many Employees?

why big tech companies are laying off

Why are Big Tech Companies Laying Off So Many Employees?

Tech layoffs dominated the last quarter of 2022. And the trend is likely to continue in 2023 and the next few years.

Barely a month into 2023, over 10 big tech companies have warned of impending massive layoffs, some having already hugely slashed their workforce.

You probably are wondering what’s going on and why the year has begun on such a low note.

Well, today we look at why big tech companies are laying off employees and if it will probably continue in 2023.

Notable Layoffs by Big Techs

The tech industry is shaky at the moment. Every week now seems to come with a fresh round of layoffs.

Thousands of tech workers have already lost their jobs and more cuts could be on the way.

Tech workers have been forced to pack their bags and leave their lucrative and previously thought to be secure jobs.

Over 105,000 employees in the tech industry lost their job last year. This year alone, over 20,000 tech employees have been relieved of their duties in tech companies.

Here are some of the notable layoffs:


The eCommerce giant and probably the largest employer in the US has cumulatively dismissed over 18,000 employees since November of last year.

The company initially planned to dismiss 10,000 employees whose roles had become redundant but recently announced that the number could rise to 18,000 by the end of the year.


The big tech recently announced over 10,000 job losses within the company. The company attributed the job losses to macroeconomic conditions and changes in customer preferences that necessitated a change in its ways of operations.

The CEO, Satya Nadella, however, assured that hiring would continue in key strategic areas and only less than 5% of the workforce would be affected by layoffs.


Alphabet had been the only big tech to have avoided layoffs in 2022, but the wave finally caught up with them in January of 2023.

The tech giant and parent company of Google recently announced layoffs of over 12000 people in 2023. The cuts will mainly affect engineering and product development teams which will experience massive downsizing.


Meta, the parent company to Facebook, WhatsApp, and Instagram let go of over 11,000 employees in 2022 in an effort to reduce headcount and cut costs.

The job losses come at a time when the social media giant is facing a huge reduction in ad revenue amidst huge competition from TikTok and other sites.

Other notable layoffs include Netflix which laid off more than 500 people after eliminating 150 jobs due to a reduction in subscriptions.

Crypto firm Coinbase also let go about 20% of its employees after laying off another 1,100 employees last year. These losses come after a volatile period in the crypto market in 2022.

Lastly, Elon Musk ran companies have seen a reduction in their headcount since 2022. Tesla has had to let go of over 300 people and Twitter has continually been on a downsizing spree after the takeover by Elon.

Why Big Tech Companies Are Laying Off Employees?

So, why big tech companies layoffs?

From web3 startups to profitable big techs, layoffs within the tech industry have become very common over the last few months. But why is this?

Obviously, different companies have different reasons for downsizing and cutting their workforce. But there are a couple of reasons common to all tech companies and businesses.

Over Hiring During The Pandemic

Most big techs over-hired during the pandemic.

Our lives transitioned to fully online during the pandemic. Everything we used to do could now be done online.

E-commerce became the only form of commerce during that time. Netflix and Amazon Prime replaced cinemas and restaurants as well. Our lives became online and everything that there was to be done was done online.

Most tech companies generated a lot of revenue from this shift during the pandemic. It was all going well for big techs.

To cope with this abrupt change and a surge in the number of customers, big techs resorted to strengthening their workforce by over-hiring. They expanded teams, created new ones, and in some cases, created new roles.

Now, the pandemic is to some extent over and the world is slowly returning to normal. People have gone back to the office, cinemas, restaurants, and even shopping malls.

Online activity has to some extent reduced compared to the pandemic era. Some of the roles created during the pandemic have become redundant. There is no need for extra teams created during the pandemic nor is there a need for bigger teams.

In a way, big techs are slowly correcting the mistake of overhiring they did during the pandemic.

And with reduced revenues especially during these hard economic and possibly recessionary times, tech companies and all other businesses are very likely to downsize and reduce workforces to essential teams only.

The Economic Situation

The world is possibly already in a recession or is soon about to be in one. There is no doubt about it; we are in hard economic times and the short-term future isn’t very nice for businesses.

Recessions are a tough time for businesses and would mean lower customer spend.

For major tech companies, a recession will most probably result in lower subscriptions and consequently revenues.

Netflix for example is already experiencing a reduction in the number of subscribers, while Facebook already expects a reduction in ad revenue in 2023.

To cope with this reduction in revenues, companies are likely to reduce their expenses and overhead, which might result in downsizing.

AI and Automations

It’s ironic that tech jobs would be replaced by advancements in technology. Automation of roles is quite a popular term now. Most roles are on the verge of being automated. And that could possibly lead to some job losses.

Some job losses have occurred as a result of automation of roles. Advanced robotics and the use of technology have replaced most traditional roles resulting in layoffs.

Amazon for example has highly deployed the use of robotics in their warehouses leading to job losses for those working in the warehouses.

And that’s just the beginning. With the rapid advancement in technology and artificial intelligence, more jobs are bound to be automated.

Though technology will never fully replace human beings, advancement in technology will surely result in some job losses and the substitution of human effort.


2023 is expected to be a tough year for businesses, especially tech businesses. The imminent recession casts a lot of doubt on businesses –their operations and financial health.

Businesses are likely to respond to the hard economic times ahead by cutting down on expenses and overheads. This might include layoffs and in some cases, closing different branches. Unluckily, you might get caught in this wave of reaction and unfortunately lose your job.

Losing your job can be a difficult and stressful experience. However, there are a few things you can do to better increase your job security and probably survive a layoff should it befall you.

Upscaling your skills is always one way to increase your value within the job market.

Upscaling your skills makes you less dispensable should your company decide to downsize. It also makes it easier for you to get new opportunities should you be looking.

PlumLogixU can help you upscale your skill or start a whole new career. We offer expertly curated courses to teach you in-demand skills and position yourself as an indispensable resource for any organization. Check out our data science courses section and get in touch to get started!