American technology companies have recently laid off employees frequently, which has become the focus of public attention. Just on March 20, Amazon once again announced a large-scale layoff plan. There are multiple factors behind this phenomenon, which deserve our in-depth analysis and research.

Amazon plans to cut another 9,000 jobs in the coming weeks.

CEO Andy Jassy made it clear that multiple teams including cloud computing and advertising are involved.

This is enough to reflect Amazon's determination to adjust its business structure.

Although the cloud computing business is Amazon's strength, it has recently suffered from layoffs.

Competition in the advertising field is fierce, and Amazon also needs to make corresponding adjustments to its staffing to cope with the challenges.

Additionally, headcount reductions of this magnitude reflect Amazon's ongoing reassessment of the value and effectiveness of each team.

The company's various teams have not yet finalized the specific positions to be eliminated. It is expected to complete the relevant work between mid- to late April and inform the affected employees of the relevant information.

During this time, employees may be experiencing significant psychological stress and their job status may be affected, primarily because they are unsure whether they will be fired.

On February 2, Amazon’s financial report revealed that its net sales growth rate in 2022 reached a record low, while its net loss was as high as US$2.7 billion.

This is a dangerous sign.

Poor overall business conditions are the direct cause of its layoffs.

In the area of ​​cost control, starting from the fourth quarter of 2022, we have taken measures such as closing some stores, reducing projects, and suspending recruitment, aiming to reduce expenses.

However, this operation did not immediately improve the financial situation.

Preliminary preparations have been made. At the beginning of the year, news of more than 18,000 layoffs was announced, and now, new layoffs are still ongoing.

According to data from the .fyi website, 1,051 technology companies around the world will lay off more than 160,000 employees in 2022.

At the beginning of 2023, the situation becomes increasingly serious. Globally, 503 technology companies have laid off employees, and the cumulative number of employees has exceeded 148,000.

This number is shocking.

Many technology companies will face pressure to make profits.

In many technology parks, companies have reduced their rental of office space, which indirectly reflects the decline in the number of company employees.

The progress of science and technology is becoming more and more perfect, but the development of many businesses has not been as rapid as expected. Therefore, layoffs have become a measure that many companies have to take.

Meta Corporation in the United States has also fallen into a wave of layoffs.

The second round of large-scale layoffs was announced on the 14th of this month, affecting approximately 10,000 employees.

In November 2022, 11,000 layoffs were announced.

Meta is a well-known technology company with a wide range of businesses covering many fields such as social media.

Meta-owned social platforms such as Facebook have many users, but advertising revenue is not growing fast. At the same time, expanding new businesses such as the Yuan Universe requires huge investment. These factors have forced Meta to lay off employees frequently in order to cut expenses and ensure the stability of the company's operations.

The "cooling" of the overall economic situation in the United States has had a great impact on the technology industry.

When the economic situation is poor, consumers' purchasing power and companies' investment enthusiasm will weaken.

Offline physical commerce in the United States is affected by inflation and other factors, and the number of consumers has decreased, resulting in a decrease in the profits that many technology companies receive from commercial physical customers.

And this is a problem faced by the entire industry, and no company can be immune to it.

The U.S. Consumer News and Business Channel reported that the number of Amazon employees was approximately 800,000 at the end of 2019, increasing to 1.6 million by the end of 2021. This data shows that many companies have overhired during the new crown epidemic, which may be an important factor in the current wave of layoffs.

During the epidemic, companies were overly optimistic about the market prospects and increased their recruitment efforts. However, as the economic environment returned to normal, the problem of overstaffing emerged, and the company had no choice but to lay off employees.

Executive decision-making errors are also an important reason why companies have to lay off employees.

Some technology companies make bad choices in business expansion.

For example, some companies invest too much in projects that are emerging but have not yet been fully tested by the market. For example, some companies blindly follow the Yuanverse concept and invest a lot of manpower, material and financial resources without conducting sufficient market research. However, the market responded tepidly to this, and its earnings fell far short of expectations. In the end, in order to make up for the losses caused by wrong decisions, it had to lay off employees to reduce operating costs.

How long do you think this wave of layoffs in the U.S. technology industry will continue?