These days, globally, people are concerned about inflation. Across industries, companies, including multi-national firms, are firing employees to maintain their market position. Interestingly, Silicon Valley companies are at the forefront of mass layoffs. Amazon is about to lay off 10,000 employees. For Meta, the number is 11,000. Twitter has laid off 3,700 staff. Snap, the parent company of Snapchat, is reportedly planning to remove 20 per cent of its staff. According to Bloomberg, Intel would lay off 20 per cent of employees. Byju’s, Unacademy, and Udaan are also cutting employee numbers. It is estimated that, in America, 12,000 people have lost their jobs.
What has caused this situation? During the pandemic period, a time when people were confined to their homes, employment suddenly increased as the demand for services spiked. Companies competed to provide anything and everything online. Many tech companies believed that this trend would go on even after the pandemic and hired more talents. However, when restrictions were lifted and people restarted their everyday life, the demand fell. The new investments became a liability to the companies. Online ad revenue also decreased. Tech firms like Meta were in trouble as restrictions were enforced against targeted ads. This encouraged the companies to shut down unprofitable projects and cut down expenses by reducing the number of employees.
The Russia-Ukraine war has also adversely affected the job market because global economies are grappling with inflation. The inflation rate in the US and Europe is higher than in the last 40 years. Raising interest rates is also a reason behind the current lay-offs. The companies are on a reset mode. Firing employees is a reflection of that move.
