The Real Story Behind 2023 Tech Layoffs
Focusing on the layoffs that happened doesn't tell the real story of the past 12 months. Here's what happens when we take into the hiring that happened, *tog...
Focusing on the layoffs that happened doesn’t tell the real story of the past 12 months. Here’s what happens when we take into account the hiring that happened, together with the job cuts:
Big Tech companies that let people go still hired more, net, than e.g. Apple which hired slower.
While I don’t have hiring data for all companies that announced layoffs, I would expect a lot more companies to fit this trend.
The SAP Example
Take SAP, a company that announced layoffs just today: to let go 3,000 people (about 3% of staff). The company hired more than 11,000 employees in 2022 (11%) and even after taking this cut into account, their 2022 growth rate will have been 8%: ahead of e.g. Apple’s 6% headcount growth.
”Want” vs “Must”
To be clear, the job cuts by Microsoft - which posted its best-ever full-year results in 2022, profits of $72.9B - and Google - which is expected to have its second-best year in 2022, with profits of around $66B - were not a “must” for these companies, in that they could not afford to have them.
They were a “want” in order to serve their shareholders.
One company that did not do any cuts so far is Apple. I did a deep-dive on why this is, and why I think it’s likely to stay like this. My analysis is here.
I analyzed much more in depth in why, for example, Google did its historic job cuts - when its profits did not necessarily warrant this - and what Google’s cuts mean for the company, and the industry, in this week’s The Pragmatic Engineer.
Subscribers can read that issue here: The Pragmatic Engineer Issue
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