U.S. tech industry is going through some turbulent times. Many large enterprises managed to perform exceptionally well during the pandemic and their revenues multiplied during that time. However, the growth has now subsided and is denting companies profits. In wake of high consumer demand the companies hired massively during the past couple of years. But, factors like declining revenues, low consumer demand and recession fears is forcing the tech companies to cut jobs.
Economic woes in United States
United States economy is witnessing soaring inflation and rising interest rates in recent times. The inflation touched a 40-year high. Therefore, the employers are forced to raise the wages of employees in order to retain them. On the other hand, with diminishing profits and decrease in consumer demand employers are feeling the heat. Initially, many companies including Microsoft, Amazon and Apple imposed hiring freeze is a bid to reduce costs. However, the economic concerns became graver. Therefore, the companies have now initiated job cuts as a last resort.
Job cuts at big companies
Meta, Microsoft, Netflix, Twitter & Seagate have already initiated thousands of jobs cuts. Moreover, Amazon has become the latest companies to let go of more than 10,000 workers during this week. Previously, Twitter has announced to lay off 50 percent of its existing workforce. Similarly, Meta has also cut 11,000 jobs in Facebook, Instagram and WhatsApp. In October, Microsoft laid off 1,000 corporate workers to reduce its expenses.
Chips Act and job cuts
Recently, the U.S. senate passed a Chips Act in order to support the chip making industry. They bill will enable the chip manufacturing companies to avail multiple benefits in terms of tax incentives. Despite of it, U.S. largest chips maker Intel has laid of multiple jobs. Similarly, GlobalFoundries has also announced layoffs and initiated a hiring freeze as well.
The trend of job cuts in the U.S. tech industry is rising and does not seem to halt anytime soon. However, overall job growth numbers are encouraging and may provide the some support to the ailing economy in times of recession.
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