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In 2022, the global economy entered a period of economic uncertainty as the latest round of tech layoffs indicates, is spilling over into this year. The geopolitical upheaval in Europe triggered the fed to hike interest rates thereby increasing inflation that ultimately impacted consumer spendingOpens a new window . The recent spur of tech layoffs led to comparisons of the pandemic bubble (burst?) with the dot com bubble burst. Let us see why this is a false equivalence.
While tech layoffs bear some semblance with those observed in the early 2000s in absolute terms, the scale of marching orders being handed to tech workers in 2022 and 2023 is significantly smaller, as outlined in the table below.
Event
Year
Total Tech WorkforceOpens a new window (Approximate)
LayoffsOpens a new window
Laid Off as % of the Total Tech Workforce
Nasdaq Composite Index (January 1)
Nasdaq Composite Index (December 31)
% Change
Dot Com Bubble Burst
2000
3,400,000
915,962
26.94
3,940.35
2,470.52
-37.3
2001
3,600,000
1,524,832
42.35
2,772.73
1,950.40
-29.65
2002
3,500,000
1,272,331
36.35
1,934.03
1,335.51
-30.94
2003
3,600,000
1,216,886
33.8
1,320.91
2,003.37
51.66
Great Recession
2008
4,100,000
1,516,978
36.99
2,389.86
1,577.03
-34.01
2009
4,000,000
2,108,202
52.7
1,476.42
2,269.15
53.69
2010
4,000,000
1,257,134
31.42
2,147.35
2,652.87
23.54
2011
4,200,000
1,112,710
26.49
2,700.08
2,605.15
-3.51
COVID-19 Aftermath and Russia-Ukraine War
2022
8,722,295
158,951
1.82
14,239.88
10,466.48
-26.49
2023
8,900,000
56,570*
0.635
11,364.41
–
NA
* Layoffs so far in 2023
Nevertheless, 1,035 companies fired 158,951 tech employees in 2022, according to Layoffs.fyi dataOpens a new window . So far in 2023, 173 companies have offloaded 56,570 employees. Some of the companies that have resorted to axing employees to minimize operational expenses include:
Amazon – ~18,000 employees and shut down several warehouse expansions and other projects
Meta…..
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