4 reasons for the massive tech layoffs

Complements to the new year😊

Playing as I write this is a Tems playlist. I highly recommend; soothing and not distracting.

Also, what a beaut!

The tech space has been in a season of unromanticization, plagued by layoffs and stock dips.

Is the tech bubble finally bursting?

Well, the simple answer is No.

Layoffs have been a part of industry cycles for time in memorial, so let's not get dramatic.

That said, are the layoffs unfortunate and scary?

Yes.

Let's look at the reasons attributed to the massive layoffs;

1. Investor Agitation

With the tech space being one of the most investor heavy industries, we are witnessing a majority of tech companies adhere to investor pressure.

Investors and venture capitalists are concerned about their company's profitability and have been cited requesting 'aggresive action' to reduce headcount and lessen expenses.

Some of the companies that have received these pressures include Alphabet(Google's parent company) and Meta.

2. Copy Cat Mentality

Layoffs from BigTech, a slowness in the economy and an ingrained mentality that layoffs increase profitability have all resulted in companies moving in fear and making decisions based on other companies.

In short; the copy cat mentality.

3. Economic Slowdown

The notion around a looming recession has reduced spend by the general population and consequently revenue within tech companies. This coupled by a dip in company stocks has led to many companies opting to get leaner in an adjustment to the same.

4 Post-pandemic miscalculation

During the pandemic, tech, delivery and work-from-home firms flourished as product demand rose.

To capitalize on this rise, companies expanded their workforces at breakneck speed to provide the services and growth customers required.

But as the pandemic settled and spending slowed, most companies came face to face with their actions; overzealous hiring practices

Most companies overhired and underestimated the likelihood and impact of a slowdown.

Now, here we are.

Surprising, right?

We often think that companies/seniors/founders should know better, hence should do better.

This is far from the reality.

We are all warped in a game of trial and error, and it's mostly error.

That said;

Remember that life has no absolutes.

Just as hundreds are firing, hundreds are hiring.

So - keep your head up.

Happy Tuesday folks ✨✨