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Some of the world’s biggest tech companies announced a wave of layoffs this week, reversing course after years of expansion, shedding tens of thousands of jobs.
Google’s parent company said on Friday it would cut 12,000 jobs. Microsoft and Amazon eliminated a combined 28,000 jobs on Wednesday. All told, tech companies have cut more than 200,000 jobs since the summer.
But “this was largely to be expected,” said Alex Zukin, managing director of Wolf Research.
“I think a lot of companies are getting their staff size right.”
He said most of the big tech companies have been hit hard by the pandemic. In the year They are betting big that the behavior of people and businesses during the 2020 Covid restrictions will lead to a permanent shift to a more online lifestyle.
Microsoft CEO Satya Nadella said in an email to employees that customers are adjusting to the economic slowdown and trying to “optimize their digital spending to do more with less.”
Zukin says Microsoft is a perfect example of a company that has expanded too quickly.
Nadella took over the company “From 60,000 workers to 220,000. So, they’re going down 10,000, which is not that surprising,” Zucchin said.
Earlier this year, Canadian tech giant Shopify passed a similar bill. At the time of the outbreak, CEO Toby Luttke made a big bet that e-commerce would “grow ahead in five or 10 years.”
Shopify has doubled its headcount since the start of 2020 and was forced to lay off 10 percent of its workforce this summer.
“Ultimately, it was my call to make this bet and I got it wrong,” he said in a memo to employees. “Because of this, we have to say goodbye to some of you today, and for that I am very sad…. For a company like ours, this news will be difficult to digest.”
Since then, the biggest names in technology have followed.
But economists who track employment rates say those laid off workers have little trouble finding new jobs.
“Through December, many tech workers who were laid off earlier in the cycle seem to have found new jobs relatively quickly,” said Aaron Terrazas, chief economist at job search site GlassDoor.
“A technology skill set, whether it’s engineering or data science, is incredibly valuable, so to some extent we’re seeing technology become less technical and traditional companies become less technical,” he said.
In fact, Canada’s technology sector led the way in job creation last month, with professional, scientific and technical services companies adding more than 100,000 jobs.
And yet Bloomberg Intelligence senior technology analyst Anurag Rana says there is currently a shortage of highly skilled tech workers in the market.
A big reason, he says, is that traditional Silicon Valley companies aren’t the only ones looking to recruit tech talent.
“Look at what happened with Southwest Airlines in America. Their system is so old. They said it would cost a billion dollars for new technology,” Rana said in an interview this week. “So I’m not worried that the technology trend will stop here or that the technology costs will stop forever. It’s just a temporary pause.”
As Silicon Valley giants lay off thousands of workers, smaller companies are struggling to find and retain tech talent.
Jennifer Reed is the senior director of talent acquisition at Dosebo, a software company headquartered in Toronto. She scours the world for skilled workers to build software to help companies train and bring in employees.
“With the layoff climate we’re seeing, it’s always competitive. The supply is far short of the demand,” Reid told CBC News.
The company currently has dozens of open positions ranging from product engineering to software development.
When one of the biggest companies announces layoffs, email and text chains start buzzing.
“When we look at an appointment, you’ll see our Slack channel light up,” said Rhonda Mora, Docebo’s director of global public relations.
That means out-of-work employees have more options.
Evelyn Watts was fired from an Ottawa-based technology company in December. She had seen this cycle play out before.
“I’ve been in tech for 20 years, so I’ve been through some ups and downs. This is not my first time at work,” she said. But Watts knows some employees are going through this process for the first time.
“For some people, it’s their first time, it’s a little boring. But really, technology changes constantly. Businesses change and there are always new opportunities.”
It may be counterintuitive to think of this as a time of opportunity for the technology sector. But the sector is cyclical. As technology permeates every aspect of our lives, the number of companies hiring tech workers has exploded.
So even in this wave of layoffs, tech workers have more choice and more opportunities than almost anywhere in the history of the industry.
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