Layoffs a warning sign

Technology companies are on a firing spree: Meta, Twitter, Redfin, Zillow, Lyft, Stripe and GoFundMe have all announced massive layoffs in recent days. Amazon is expected to axe about 10,000 corporate staff soon. After nearly two decades of rapid growth, tech is facing a business reckoning.

Are these layoffs early signs of a US recession? Yes and no. Today’s tech sector is, in many ways, a classic example of an industry that got too big too fast and needed some belttightening and rethinking.

Still, this month’s tech firing drama is a wake-up call for all businesses and workers.

The Fed’s rate hikes are squeezing a lot more than the housing sector now. It’s increasingly unlikely the nation can avoid a recession. Consumers and investors are growing a lot more cautious. More layoffs are inevitable.

The end of easy money will have devastating effects on struggling families trying to survive high inflation and layoffs. For Big Tech, however, this reset might finally bring the maturing the industry needs.

Lawmakers, regulators and advocates have slowly pushed for safeguards to stop the worst online abuses. Now investors are demanding changes to entire business models. It will be a messy transition, but if economic history is any guide, what eventually emerges could be better for investors and users alike.

This opinion is not necessarily shared by Stuff newspapers.