Friday, December 9, 2022

Technological miscalculated what the post-pandemic would be like and fell flat on their faces

During the pandemic, the whole world turned to technology companies in search of alternatives to face-to-face work, the supply of goods and entertainment and in 2021, when the light at the end of the tunnel was already in sight, this union predicted that its growth would continue beyond the waves of covid and bet on large hires.

However, this year the fall in the advertising market, geopolitical tensions, inflation and the rebound in the service sector caused its future to be twisted and the great leaders of technology began to press the brakes before it is too late.

bad business results

The latest business results showed that the five big technology companies -Amazon, Meta, Alphabet (Google), Apple and Microsoft- obtained a joint profit of US$178.992 million during the first nine months of 2022, 19.3% less than in the same period of 2021, after an increase in costs and despite breaking the trillion dollar barrier in revenue.

In particular, the joint benefits of these companies were affected by the losses of US$3,015 million registered by Amazon between January and September 2022, compared to profits of US$19,137 million in the same period of the previous year, due to the loss of value. from the American electric vehicle manufacturer Rivian.

Against Amazon, Meta, Alphabet, Apple and Microsoft obtained benefits, but none of them improved their result compared to the previous period.

The hiring roller coaster

Meta – parent company of Facebook, Instagram, WhatsApp and Messenger – is a good example to illustrate the roller coaster of hiring that has occurred in recent years in technology companies.

The company added more than 27,000 employees to its workforce between 2020 and 2021 and another 15,344 workers in the first nine months of this year.

However, earlier this month it completely changed its strategy after announcing that it was laying off 11,000 workers, 13% of its workforce.

“Many people predicted that 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 go as expected, ”said Meta delegate and Facebook founder Mark Zuckerberg in his statement.

The technology giant Amazon, one of the largest employers in the US, where around 1.5 million people work and which had also opted to increase its workforce, has begun laying off workers in different areas this month.

The company plan is to lay off approximately 10,000 workers starting this week, according to The New York Times.

Amazon CEO Andy Jassy told his employees in a letter that layoffs at his company will continue into next year.

“It is not lost on me or any of the leaders making these decisions that these are not just jobs we are eliminating, but people with emotions, ambitions and responsibilities whose lives will be affected,” he noted.

In total this month, more than 25,000 workers in the technology sector have been laid off, according to The Wall Street Journal (WSJ).

Despite the layoffs, there are more employees than before the pandemic

But despite the large number of layoffs, companies are not shrinking to pre-pandemic levels.

In the case of Meta, it has 13% more employees than in 2020; at Amazon, 1% more than before the pandemic and at Netflix – which has laid off 3% of its workforce – it has increased by 4% compared to 2020, according to data from the WSJ.

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