Technology

Big Tech binged on workers during Covid-19, but is now purging them


The layoff announcements coming lately from the chief executives of big technology companies all contain variations on the theme of “we hired too many people during the pandemic”, expressed with varying degrees of contrition.

At one end of the spectrum are Seattle’s Mr Andy Jassy of Amazon.com and Mr Satya Nadella of Microsoft Corp.

Amazon’s layoffs were simply an outgrowth of its annual review, Mr Jassy wrote, although he did allow that “this year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years”.

Microsoft’s Mr Nadella opted for bland corporate speak: “As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less.”

Down in the San Francisco Bay Area, there was more of a willingness to hint that errors had been made. 

“Over the past two years we’ve seen periods of dramatic growth,” wrote Mr Sundar Pichai of Google parent Alphabet. “To match and fuel that growth, we hired for a different economic reality than the one we face today.”

Mr Marc Benioff from Salesforce was even clearer, saying: “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”

Then there was Meta Platforms CEO Mark Zuckerberg of, who opted to treat his November layoff message to employees as something of a confessional: “At the start of Covid-19, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected.”

Mr Zuckerberg, of course, may have many other things to be contrite about, starting with the 2021 decision to rename Facebook and bet its future on virtual-reality headsets. But, yes, Meta truly did hire a whole lot of people in 2020 and 2021, with headcount up 60 per cent over that period.

For Microsoft, Alphabet, Salesforce and Meta, the combined increase was 35 per cent, or 126,170 jobs.

The layoffs announced so far by these four companies total 41,000, about a third of the jobs they added since 2019. Amazon is on a different employment plane, with most of its workforce labouring not at computers but in warehouses, supermarkets and other elements of what the company calls “field and customer support”, which is why I left it off the chart. It added 810,000 employees from 2019 to 2021, more than doubling its headcount, and employs more people than any US corporation other than Walmart.



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