Why Thousands of tech workers were laid off by Amazon, Google, and Microsoft
Numerous large digital businesses, including Google and Amazon, have been laying off thousands of employees. Within 48 hours of each other, Microsoft and Google both said they were firing 12000 employees, with Microsoft making the announcement first. In Google's case, 10,000 individuals, and I believe

Malcolm Ethridge (CIC Wealth Executive Vice President)

"Many are currently thinking, "Oh well, that's just in the tech industry; it's a white-collar layoff; it doesn't really mean as much as it should," but in reality, there are still hundreds of thousands of jobs at stake."

What will the widespread layoffs in technology entail for the overall economy?

When Meta announced last year that they were spending so much money on the metaverse that they were losing up to 13 or 14 billion dollars on this project, investors reacted negatively and Metastock fell more than 70%, losing more than 700 billion dollars in value before Meta decided to lay off 11000 employees. This was the first of the layoffs. Following the announcement, the stock increased.

Amazon, the next major player in technology, said last year that it will be firing up to 18000 employees this year. This is due to the companies' excessive recruiting and expansion during the epidemic, which led to their mass layoffs.

Brad Erickson (RBC Capital Market)

We sense a need to reduce expenses. There has undoubtedly been a slowdown in the advertising industry over the past six to nine months, and this is unmistakably the response in order to maintain margin pressures.

Paul Flood (Global Technology sector specialist)

Technological behemoths that are laying off workers are essentially conglomerates, so while layoffs in the tech sector as a whole may seem alarming, it is less of a concern if they are occurring in areas of the companies' businesses that are structurally weaker or may be declining, such as areas like azure in the case of Microsoft.

Why are layoffs at these major IT businesses all related in some way? 

When the pandemic first struck and people were stuck at home, businesses had to figure out how to help their employees work from home, which meant buying a lot of computers, buying a lot of I.T. services, buying a lot of Zoom subscriptions, you name it. All of this caused a lot of money to be injected into the tech industry, and some people in the industry, and some Executives got a little overconfident thin. As the next generation of technology, notably artificial intelligence, approaches, we are seeing these organizations refocus on their main objectives.

Grag Branch (Veritas Financial)

What's occurring in tech is mostly that they are downsizing after the recent demand burst, which was off-trend; as a result, they hired to fulfill those surges, hiring much over their organic Pace and growth rates.

Brad Erickson (RBC Capital Market)

Many times In other cases, there are businesses where over time they've been very sort of on cost-conscious so they've been investing for growth of all costs and for that reason have fairly weak profitability relative to where invest. Not only was there the increased need we'll call it for infrastructure expansion and those sorts of things but also you had just such a rush of customers you needed salespeople you needed customer support other levels of operating costs essentially but in other cases, there are businesses where through time they've been very sort of on cost

What's next?

The large guys will be okay even if things do grow worse since there will likely be further consolidation. Google will be alright. Regardless of how bad the economy gets, Apple won't go out of business anytime soon, but you should keep an eye out for some of the weaker businesses—growth companies that either had no profits or were barely profitable—as they might fail or turn into really attractive acquisition targets in this environment.