The Tech Bubble Bursts as Layoffs Make Headlines

The labor market has seen a jolt in the number of layoffs in tech, real estate, and the manufacturing industry. Big headlines have been making rounds all over the net and on social media. Such loud and public layoffs are unprecedented in the previous age of quiet quitting and the ‘Great Resignation’. Twitter and LinkedIn are filled with heartfelt posts of people recently laid off by big-name companies, once thought to provide jobs secure from recession. What has catapulted the job market in a rundown of layoffs? What does the future hold for the unemployed? These are some of the questions looming in the minds of the labor force.

The CEO of Meta, Mark Zuckerberg has laid off 11,000 workers and Elon Musk has publicly fired more than half of Twitter’s workers, according to NBC. Not only tech but advertising and government jobs have also seen a reduction in hiring with some firms also practicing a hiring freeze. These firms are, rather, letting people quit or not refilling their positions after the boomers are retiring. The rise in prices due to the Ukraine War and the surging inflation has pushed organizations to cut spending. Most firms like Amazon, Salesforce, HP, Lyft, and Doordash have resorted to layoffs only after exhausting other means of reducing expenses. It also does not help that the Federal Reserve wants to reduce hiring in order to prevent an increase in wages which adds fuel to the soaring prices.

However, what comes as a relief is that the layoffs have been concentrated in the tech industry which only constitutes 2% of the employment in the US. According to the labor department reports, layoffs across the entire economy in October were largely unchanged at 1.4 million, low by historical standards. “There were roughly 1.7 posted jobs for every unemployed worker, still extraordinarily high.”(Ember) Hence, in the big picture, the rest of the market is fairing well. It is not to say that the job market is not gradually slowing down but the market won’t see layoffs close to the ones in the 2008 recession.

A cause for concern is that people who are now frantically looking for new jobs are being less picky which reduces their ability to negotiate higher pay. The lure of the tech industry has further created competition in these times of layoffs. The small and midsize companies who needed talent will now have an opportunity to hire the newly unemployed to whom they could not provide the exorbitant salaries that the giant companies are known for.

All in all, the new changes in the labor market have been opportunistic for small and midsize companies and rough for the big tech corporations who “overhired.” These are not dim times, as new jobs are being created each day. There is room for everyone despite the growing competition. The economy is predicted to grow after the expected 2023 slowdown.

Sources:

Job Openings Ease, but Layoffs Are Little Changed

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