The layoffs announced in recent weeks by Big Tech companies like Google and Microsoft are unlikely to cause huge issues at the companies or in the economy.
Alphabet Inc. announced 12,000 layoffs Friday morning, which will revert Google’s workforce to the size it was … sometime in the second half of last year.
While 12,000 is a lot of workers losing their jobs, it is still less than the net number of hires Alphabet GOOGL GOOG made in just the third quarter of last year, which totaled 12,765. This is just one example of why the layoffs announced in recent weeks by Big Tech companies, although together totaling huge numbers, are unlikely to cause similarly huge issues at those companies or in the larger economy.
Microsoft Corp. MSFT grew its workforce more than 50% from mid-2019 to mid-2022, hiring roughly 77,000 workers; it recently announced 10,000 layoffs. Facebook’s parent company, Meta Platforms Inc. META , nearly doubled its head count from roughly 45,000 at the end of 2019 to more than 87,000 at the end of the third quarter of 2022, then decided to cut about 11,000 workers.
Established tech companies are also still hiring. At Davos in recent days, the chief executives of Palantir Technologies Inc. PLTR and Workday Inc. WDAY said they expect to hire more employees this year, even as enterprise-software stocks take a beating.There certainly could be more widespread pain if large-scale layoffs continue, but the announcements so far and the effects on the larger economy that have been observed do not indicate that a wide downturn is on the way yet.
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