GLOBAL TECH INDUSTRY AND LAYOFFS AT TWITTER, META, AMAZON
Tech stocks which were the toast of investors in the United States (USA) have nosedived in the last one month creating a major nightmare for investment in this sector in 20 years.
From Amazon to Meta and now Twitter and 72 other tech companies, no fewer than
WHFK ZRUNHUV KDYH EHHQ ODLG RͿ WKLV month alone adding to a total of 120,000 tech jobs lost this year.
As it appears right now, the days of moonlighting are over as each company tries to grapple with its own realities. The companies making public statements now cite at least one of two major reasons for the crisis.
Some hired many workers during the pandemic, when people were extremely online and so needed more hands.
But now the internet boom is over as RLQH OLIH KDV SLFNHG XS DQG WKRVH QHZ employees seem too expensive to manage.
Besides, the global economic downturn has not helped matters making it impossible for brands reluctance to spend on digital ads–a source of revenue for many tech companies. High interest rates are also said to have put an end to the cheap-money era of venture capital.
So in reality, companies have returned to the drawing boards to rejig operations if they must survive and continue in business. “My way or the highway” according to new Twitter Chief Executive and owner Elon Musk concluded, a predictable nightmare for ZRUNHUV DW 7ZLWWHU DV KH EHJDQ PDVV OD\RͿV about a week ago.
This approach to motivate workers appeared to be a wrong message at the wrong time for workers who were working feverishly in an environment less familiar than what they knew.
0XVN KDG ÀUHG HPSOR\HHV EHOLHYHG not to be meeting expectations as expected by the new owners.
In reality those remaining are said to be the company’s top performers, the ones with a WUDFN UHFRUG RI JHWWLQJ VWXͿ GRQH
Musk told them to “work harder.” But that was where the romance ended as mass resignations ensued last week over a purported oath taking ceremony for loyalty to work for long hours without complaining.
The oath taking was a bitter pill to swallow especially in a system where many talented people will want to make a choice at a time when there’s roughly two openings for every job seeker.
Musk literally told his best remaining workers that they can either sign a loyalty oath pledging to work epic hours under intense pressure for a mercurial boss who
FRXOG ÀUH WKHP DW D PRPHQW·V QRWLFH « RU WKH\ FDQ KDYH WKUHH PRQWK·V SD\ DQG ÀQG better jobs.
Having paid $44billion to close the Twitter acquisition deal, Musk has had a long reputation for managing with sticks rather than carrots and those who have worked for him knew his antics and these Twitter workers were prepared for the worst.
By last week Friday, Twitter closed its RFHV DIWHU KXQGUHGV RI HPSOR\HHV UHMHFWHG WKH QHZ RDWK WDNLQJ RͿHUV WR VWD\ RQ DW WKH company only if they committed to an “extremely hardcore” work schedule of “long hours at high intensity.” Twitter’s message to LWV VWDͿ RQ )ULGD\ ZDV VSHFLÀFDOO\ WR LQIRUP WKHP WKDW ´HͿHFWLYH LPPHGLDWHO\ ZH DUH WHPSRUDULO\ FORVLQJ RXU RFH EXLOGLQJVµ XQWLO 0RQGD\ WKLV ZHHN ,W WROG WKH VWDͿ WR “continue to comply with company policy E\ UHIUDLQLQJ IURP GLVFXVVLQJ FRQÀGHQWLDO company information on social media, with the press or elsewhere”.
:KLOH 7ZLWWHU ZDV EDWWOLQJ LWV VWDͿ WR WDNH the oath or accept a three-month pay and hit the highway, Meta Incorporated Chief Executive, Mark Zuckerberg sent an emotionladen mail two weeks ago announcing mass OD\RͿV DV D UHVXOW RI SRRU ÀQDQFLDO VKRZLQJ of the company whose platforms-Facebook, Instagram and WhatsApp were said to be UXQQLQJ DJDLQVW ÀQDQFLDO WLGHV
,Q D WHUVH PHVVDJH WR LWV VWDͿ =XFNHUEHUJ wrote that he was “sharing some of the PRVW GLFXOW FKDQJHV ZH·YH PDGH LQ Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional VWHSV WR EHFRPH D OHDQHU DQG PRUH HFLHQW company by cutting discretionary spending DQG H[WHQGLQJ RXU KLULQJ IUHH]H WKURXJK ÀUVW quarter of 2023”.
He blamed the downward trend in business to Covid, which rapidly moved online and the surge of e-commerce leading to outsized revenue growth.
He told the beleaguered workers that many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. He said he was worried WRR VR WRRN WKH GHFLVLRQ WR VLJQLÀFDQWO\ increase “our investments.” “Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that,” he lamented.
Meta was moving to a new environment KRSLQJ WR EHFRPH PRUH FDSLWDO HFLHQW E\ shifting more of its resources onto a smaller number of high priority growth areas — OLNH LW·V $UWLÀFLDO ,QWHOOLJHQFH $, GLVFRYHU\ engine, the company’s ads and business platforms, and the long-term vision for the metaverse.
“We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our HFLHQF\ %XW WKHVH PHDVXUHV DORQH ZRQ·W bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go,” he reasoned.