In an uncertain economic climate, several large corporations have announced layoffs in an effort to reduce costs and maintain their competitiveness. While layoffs may be a necessary business action in some cases, they may also be detrimental to workers, communities, and the whole economy.
When layoffs are announced, employees may experience a variety of difficulties, such as a loss of income, trouble obtaining new employment, and a fall in morale and job satisfaction. Moreover, layoffs may result in lower consumer spending and a delay in economic growth, among other larger economic effects.
Many workers were laid off by large IT businesses.
Almost 3,900 workers of the International Business Machines Corporation (IBM) will be let go in 2022, the company has stated. More than 1,50,000 people were laid off in the tech sector alone in 2022, including over 11,000 jobs cut at Meta Platforms Inc., 10,000 jobs cut at Microsoft, 18,000 jobs cut at Amazon, 12,000 jobs cut at Google, 600 jobs cut at Spotify, 10% of Salesforce’s jobs cut at Twitter, 3,700 jobs cut at Cisco, and 10,000 jobs cut at Amazon. Moreover, HP stated that it will axe up to 6,000 positions by the end of the fiscal year 2025.
Companies’ efforts to simplify operations and maintain competitiveness in a fast shifting economic environment led to these employment cutbacks. The biggest American tech companies—Alphabet, Amazon, Microsoft, and Facebook-owned Meta—are to blame for 51,000 of the latest tech layoffs. According to media estimates, entrepreneurs fired more than 10,000 workers in 2022, mostly in the edtech and e-commerce industries.
Why are these layoffs taking place?
Global economic development has been halted by the Covid-19 epidemic, and the International Monetary Fund (IMF) has issued pessimistic predictions for 2022 and 2023. Alphabet’s earnings were worse than expected, falling short of forecasts for revenue and profit. Experts predict that between October and December 2022, the five big technological companies—including Apple—will post poor earnings. Amazon is anticipated to disclose earnings down 38% and the weakest revenue increase in more than 22 years. Cost-cutting is one of the key causes of layoffs.
What effect does it have on Indian workers?
Workers who are laid off may have psychological issues as well as financial hardships. 30%–40% of those let off are IT experts from India, and many of them are in possession of H-1B and L1 visas. Tens of thousands of employees from countries like China and India must be hired by technology businesses every year, and many of them are now seeking for methods to stay in the United States and find a new job within the constrained few months allowed by these foreign work visas. Due to the poor demand caused by worries about an American recession and excessive inflation in Europe, the majority of Indian IT businesses have paused or slowed down employment. It’s critical to think about how layoffs by large corporations will affect workers, communities, and the whole economy, as well as to look for alternate ways to cut expenses wherever practical.
