A look back at the root of the latest tech layoff spree

Nishita Gupta
Nishita Gupta February 1, 2023
Updated 2023/02/01 at 2:40 PM

The COVID-19 pandemic caused a tech boom as the shift towards remote work and online commerce accelerated. Companies in the technology sector experienced significant growth as the demand for their products and services increased. And this has accelerated the adoption of many digital technologies. Remote work became the new norm, leading to a surge in demand for remote collaboration and communication tools. This in turn drove growth for companies like Zoom, Slack, and Microsoft Teams. Some of the tech trends that emerged during the pandemic include:

  1. Remote work tools: Video conferencing, collaboration, and project management tools saw a surge in usage as companies moved to remote work.
  2. E-commerce: Online shopping and delivery services saw a surge in demand as people avoided physical stores.
  3. Healthcare technology: Telemedicine and remote patient monitoring solutions became crucial in providing medical care while reducing the risk of virus transmission.
  4. Edtech: The shift to online learning drove growth in the educational technology sector.

However, after the pandemic boom of a few years, technology companies ended 2022 with a bleak outlook. Across the sector, thousands of jobs were cut to correct the over-hiring of the Covid period, and brace for, what experts call, a period of slower growth for the sector. The layoff wave has swept not only startups and mid-sized firms, but also big tech companies such as Amazon, Microsoft, and Google parent Alphabet, among others. So far, 219 tech companies have laid off 68,149 employees in 2023, according to tracking site Layoffs.fyi 

Chart: The Largest Tech Layoffs | Statista

SAP and IBM are among the companies that have joined the layoff bandwagon more recently in a bid to rein in the costs amid a looming global economic downturn.

It is safe to say, The COVID-19 pandemic has permanently changed the way we work and interact, and while technology has been a critical enabler in making these changes possible, it has been affected too.

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