Tech companies have gone on a layoff spree since 2021 going up to 2023 and early signs from this year suggest it is not going to slow down anytime soon. The likes of Google, Amazon, and even Meta have pulled the plug on multiple projects, trimmed their product teams and realigned their plans for the future. So, what are the major reasons for these layoffs and when does it end?
Meta CEO, Mark Zuckerberg has shared his views on this matter in a recent interview, where he also walks us through the strategy of tech companies in the past few years as they have planned for and after the pandemic.
Zuckerberg was quoted saying that the first wave of layoffs during the pandemic were forced after over-hiring and the falling digital sales and overall business taking a hit. The Meta chief then highlights the sudden change in strategy from the industry, where people started seeing the benefits of having a leaner setup. “It was obviously really tough, we parted with a lot of talented people we cared about. But in some ways actually becoming leaner kind of makes the company more effective,” Zuckerberg was mentioned saying.
While it is understandable that companies decided to cut costs rather than continue keeping a bloated workforce, experts feel that the decision to lay off people could have been handled in a gradual manner rather than pushing everyone out of the door at the same time. But it seems being lean is not the sole reason for these layoffs in the past few months, especially since the start of 2024, where AI has become the primary focus of investment for most tech giants.
Zuckerberg interestingly pointed out that AI wasn’t the main reason for his company to lay off thousands in recent times, but that tune is likely to have changed with the dynamics altering in the industry. To be fair, companies don’t see any problem with these decisions, especially if their market value goes up, which means investors want to focus on the business rather than other aspects. The Meta chief is also busy tackling the entry of Apple with the Vision Pro headset, which he reviewed and compared with his company’s Meta Quest headset.
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