Massive cuts at tech giants like Meta and Microsoft dominate headlines, but don’t tell the whole story.
The collapse of Silicon Valley Bank has sent shockwaves through an economy already shaken by mass layoffs and under pressure from central banks locked in a high-stakes battle with inflation — sharpening the risk of recession and even greater job losses.
While the US economy has so far remained strong, adding 311,000 jobs in February after adding more than half a million jobs in January, central banks’ increasingly aggressive campaign of rate hikes may expose more vulnerabilities in banks with interest-rate risk, like SVB, and startups that rely heavily on venture capital funding to maintain operations and payrolls.
The rush of layoffs that began late last year isn’t letting up, marking the worst start to a year since 2009, with nearly 52,000 jobs lost in one week in January alone. Since Oct. 1, executives across sectors have sacked almost half a million employees around the world, according to a comprehensive review of layoffs by Bloomberg News.
Nowhere are the cuts as deep as at Amazon.com Inc, which alone will wipe out close to 30,000 jobs with the most recent round of layoffs announced Monday. Meta Platforms Inc. takes second place, with a sweeping 21,000 roles eliminated. But they’re just two of almost 800 firms that have slashed at least 473,000 jobs since October, with the median layoff leaving the company workforce 10% smaller, according to Bloomberg’s analysis.
The tech industry has seen some of the biggest losses, accounting for about a third of the total cuts. Company leaders said they overhired as demand for their services surged during the pandemic. The mass layoffs stunned many Silicon Valley workers, who had long enjoyed generous pay and cushy benefits. Management has promised investors a new era of austerity, with Meta Chief Executive Officer Mark Zuckerberg calling 2023 the “year of efficiency.”
Energy companies were among the least affected, with fewer than 4,000 jobs cut. Major oil companies like Exxon Mobil and Chevron have raked in record profits and announced massive stock buybacks as Russia’s war in Ukraine caused a surge in energy prices.
Across sectors, job security and stability have emerged as priorities for many workers. Around 3.9 million US workers quit their jobs in January, down from Covid-era highs though still hovering above pre-pandemic norms.
Overall, the layoffs have been remarkably concentrated. Almost half of the job cuts were carried out by just two dozen companies, including big names like FedEx, Ikea and Philips.
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