Tech layoffs continue as the Fed signals more rate hikes

Article by Jacob Bourne | Jan 9, 2023

The latest layoff numbers: A slew of tech companies have announced or enacted layoffs over the past few weeks, and the talent bloodletting shows no signs of easing in 2023.

Micron: Citing missed revenue targets, the chipmaker says it will lay off 10% of its workforce.
Twitter: The social media company has cut 40 positions in data science and engineering, adding to the 3,700 global staff and up to 5,500 contract workers it previously slashed.
Vimeo: Due to an “uncertain economic environment,” the video platform says it will reduce its payroll by 11%.
Stitch Fix: The AI-driven fashion company announced plans to cut 20% of its salaried staff.
ByteDance: Despite news of TikTok’s owner hiring for open roles, it has also enacted layoffs for 10% of its staff.
Intel: The chip giant plans to cut about 200 employees at two of its California campuses early this year.
Adobe: The company is shifting some employees to critical roles to avoid company-wide layoffs but will cut 100 workers from its sales team.
Lenovo: Declining to cite a specific number, the PC maker confirmed it will lay off some of its workers in North Carolina.
Qualcomm: Facing falling smartphone demand, the tech giant will lay off 153 members of its San Diego workforce.
As we shared last week, Amazon has raised its projected layoffs outlook from 10,000 to 18,000 and Salesforce has decided to lay off 10% of its staff in a global restructuring move.

Over 17,000 employees have been laid off from 18 tech companies in 2023 as of January 6, per Layoffs.fyi. It adds to the 153,937 tech workers laid off from 1,020 companies in 2022.

Economic headwinds for tech: It's been a rough start to the new year for the tech industry as it continues to grapple with recessionary fears.

The culprit is an overall strong US labor market that the US Federal Reserve wants to dampen as a means to rein in inflation.
The Dow Jones Industrial Average, S&P 500, and Nasdaq fell Thursday following an ADP payroll report that indicated private employers added 235,000 jobs in December. That’s significantly more than the 153,000 economists had anticipated, per Forbes.

Uncertainty ahead: Job creation among small and medium-size businesses has been good for workers, but it signals that the Fed could continue to enact bold interest rate hikes this year.

A resulting drought of capital could curtail the outlook for tech’s economic recovery and mean more layoffs.
If the Fed fails to strike a balance between curbing inflation and enabling economic growth, a full-blown recession is still a distinct possibility this year.