Microsoft layoffs 10 thousand

Bad economy or bad planning?

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Today’s topic is on layoffs - an unpleasant, but an important topic.

Showing last 4 years of headcount for big tech companies

In the last few days, Microsoft, Amazon and Salesforce have announced large-scale layoffs.

They are not the only ones.

In this month alone, 122 tech companies laid off ~37.5K employees (LINK)

I recognize that business planning is inherently difficult.

However, it appears that a lot of tech companies assumed the COVID-led tech boom will last forever, and over-hired dramatically.

In the 3 examples shown in the chart above, we see a lot of headcount increase since 2020, followed by recent layoffs. The story is same in many other companies.

While it may appear that headcounts are going back to reasonable level, we have to remember that layoffs impact lives and livelihoods.

While a lot of laid off employees will find another job soon - many won’t.

Some would have moved cities and countries to work at their new jobs, uprooting their families. A lot of that impact doesn’t captured by these charts.

I hope companies take this lesson and be more reasonable when planning for growth.

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