The backstory: It's no secret that COVID, among other things, has had a big impact on the job market. As the threat of a recession looms, many companies have resorted to layoffs to cut costs. 2022 saw a massive wave of layoffs in the tech industry, with tech giants like Amazon, Meta and Salesforce all making headlines for slashing jobs. In fact, it's still happening.
The development: According to a Challenger, Gray & Christmas report, cost-cutting was said to be the top reason for job squeezes, making up for over 82,000 of the announced cuts. The report shows that over 97,000 tech jobs were cut last year, a jaw-dropping 649% increase from the 13,000 tech job cuts in 2021. The fintech industry was unsurprisingly hard-hit because of the cryptocurrency price crash and industry scandals, seeing more than 10,000 job cuts in 2022 – a 1,670% increase from the 529 cuts declared in 2021 in the sector.
Overall, employers across all industries announced plans to cut nearly 364,000 jobs in 2022, a 13% increase from the previous year. While this may sound pretty alarming, it's worth noting that there has been much worse historically. In fact, just for a bit of perspective, it's the second-lowest number of job cuts in a year recorded total since Challenger began tracking the numbers in 1993, and the lowest number was in 2021.
"The overall economy is still creating jobs, though employers appear to be actively planning for a downturn," said Andrew Challenger, senior vice president of the firm, said in a statement released with the report. "Hiring has slowed as companies take a cautious approach entering 2023."
"As we continue with our annual operating plan review, and in light of the challenging economic conditions, we've made the difficult decision to eliminate some roles in particular businesses for which we've extended offers but the candidates have not yet joined the company," said Amazon spokesperson Brad Glasser in a statement in response to reports of the company canceling job offers because of economic uncertainty.
"They're trying to protect themselves so that they're not caught in the 2008-2009 cycle that we had," said Greg Selker, managing director at executive search firm Stanton Chase, referring to the current widespread tech layoffs similar to the labor market in the 2008 financial crisis.