What Caused All These Tech Layoffs?
Rapid hiring at ridiculous pay rates can lead to disastrous results
Stripe 14%, Twitter 50%, and Lyft 13%. Those percentages aren’t profits, they’re percentages of staff laid off this year from each company. With no end in sight, layoffs will continue to happen in tech as stock prices plummet. What happened to these giants? Well, it’s a few things alongside the recession due to inflation.
Expectation of Insane Growth
Tech companies experienced explosive growth, especially during the pandemic. These companies are held to a way higher standard than any other sector. Growth at a fast rate one year meant it had to be faster next year. Profits can’t be high for one year and be the same the next year, they have to be higher. At the start, this seemed to be a reasonable expectation since companies kept pace. However, the Internet can’t grow forever.
As of 2022, 4.9 billion people have access to the Internet. The internet is a huge part of daily life for several of us. Unless 3 billion people decide to join on the Internet, finding new markets are going to be difficult. However, business models will need to adapt, possibly for the worse, in order to continue growth long term. In the mean time, nobody is going to have a 20% profit followed by a 40% profit per year as…
