An employee washes a window at a new Apple Inc. store. Canton Road in the Tsim Sha Tsui district of Hong Kong, China.
Xaume Aleros | Bloomberg | Getty Images
Many of the biggest tech companies are laying off staff amid growing fears of a recession. But the job cuts came after several years of rapid expansion.
While every company is a little different, most companies experiencing layoffs blame macroeconomic conditions and the possibility of a future recession as the reason for the tightening of belts.
But an underappreciated factor is how quickly tech companies have ramped up hiring over the past two years.
In 2020, the widespread lockdown due to Covid has made online applications more important to people, which has increased the business of many technology companies. As sales and profits continued to grow in 2021, they continued to add huge numbers of employees in hopes that the success they had seen would become a new base. It didn’t work out that way. Growth is slowing and companies are now having to restructure.
Apple is the main exception: it has not increased its hiring rate in the past two years, nor has it announced any layoffs.
A review of SEC filings shows how fast other biggest tech companies have grown during the pandemic.
Microsoft the state had 221,000 full-time employees at the end of June 2022, the most recent official figure available. This was a jump of 40,000 employees compared to the same period in 2021, a 22% increase in headcount. A year earlier, Microsoft added 18,000 employees, an increase of 11%.
In a note on the Microsoft layoffs, Wedbush analyst Dan Ives said the tech sector had been forced to spend during the pandemic to keep up with increased demand.
“Redmond needed to hire aggressively along with the rest of the tech sector and spend like 1980s rock stars to keep up with the staggering demand,” Ives wrote in a note on Wednesday.
Amazon more complex than Microsoft because it has a huge hourly workforce for its warehouses as well as the corporate office workers seen in most technology companies.
However, Amazon grew dramatically in 2021, adding 310,000 jobs. This followed an even bigger expansion in 2020, when it grew by more than 38% and added half a million employees.
Overall, Amazon reported 1.6 million employees as of the end of December 2021, of which about 300,000 are corporate.
In a memo to employees on Wednesday, an Amazon executive said its expansion in the Covid era was one of the reasons for the cuts.
“During Covid, our top priority was scaling to meet the needs of our customers while keeping our employees safe. I’m incredibly proud of the work this team has done during this period,” Amazon’s head of retail, Doug Herrington, said in a note. obtained by CNBC. “While other companies may have balked at the short-term economy, we’ve prioritized investing for customers and employees in these unprecedented times.”
Meta (formerly Facebook) has added thousands of employees each year since going public in 2012, according to SEC filings.
Meta added more than 13,000 employees in 2020, a 30% increase, marking the largest hiring year in the company’s history. In 2021, it added another 13,000 workers. In terms of total employees, it was two years of the biggest expansion in Facebook’s short history.
alphabet, previously Google, has not cut as many positions as other large-cap companies, but it has reduced in recent weeks 240 positions in Verilyits department of medical sciences, and laid off 40 at Intrinsicrobotics division.
But while Alphabet’s recent cuts have been much smaller than some other companies, their growth has been just as significant.
In 2022, Alphabet added more than 21,000 employees, or 15% year-over-year growth, to a total of 156,500. In 2020, the number of employees increased by more than 16,000, or almost 14%.
That growth predates the pandemic, however, as Alphabet has grown its workforce by at least 10% each year since 2013, and added 20% of new hires in 2018 and 2019.
an apple grew much more slowly during the pandemic. In fact, Apple’s hiring over the past few years has followed the same general trend since 2016.
As of September 2022, Apple had 164,000 employees, including both corporate employees and retail staff in its stores. But this was an increase of only 6.5% compared to the same period in 2021, representing a real increase of 10,000 employees. Apple has also been smart about hiring in 2020, adding fewer than 7,000 employees in the year to September 2021.
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