Over staffing, restructuring and predicted gloomy economic times ahead. These are some of what experts think are behind the big tech layoffs that have happened during the past couple of weeks. According to Business Insider, The looming threat of a recession was causing customers to scale back spending, companies said — with few signs of a rebound on the horizon. Tech companies are coming off a period of outsized growth, spurred on by the pandemic.
The massive layoffs which have cut across several companies including Netflix, Twitter, Meta and Amazon have affected over 182,605 people globally. What this means is that over 182,605 people are being pushed back to the unemployed side of the labor market, further stretching the global 4.9% unemployment rate.
With a economists warning of a recession n the coming day and more people getting into the labor market, one then wonders what the impact of these layoffs would be on the global economy and on the global labor market.
A Tighter Labour Market
With highly talented and skilled being pumped into the labour market, there would be an abundance talent especially in the tech industry, this could impact entry level staff negatively as their more experienced colleagues who are coming out of big tech and would not mind a pay cut may be selected for roles instead of team.
Elementary economics explains to us that when when supply increases, price falls. This may be the case for tech talent market where due to a surplus of talents, employers can increase their bargaining power.
The negative impact of this is that inflation does not fall alongside price.
Clouds tend to have silver linings, and for the tech layoffs, it may well be more than a lining, there could be whole bright new horizon waiting to be uncovered.
Necessity they say is the mother of invention, these layoffs could be the ‘moment of lift’ for many who had been hoping to build something new. Leading to the birth a new breed of startups and collaborations that would in turn create more opportunities and jobs.
Someone once said that future of tech is in the non-tech, this has proven to be true in finance, fashion, health and shopping as they have quickly become tech-enabled industries. The agricultural sector has also seen a measure of growth in the application of tech to build solutions within the industry. A union of the tech and the non-tech could result in new levels of growth and new opportunities.
While no one can be sure of what lies ahead, we can be certain that those would be truly exciting times.
Photo: Mikhail Nilov, Pexels