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Tech layoffs: Why Meta, Alphabet, and Microsoft are cutting jobs

Yahoo Finance Dan Howley joins the Live show to discuss tech layoffs.

Video transcript

RACHELLE AKUFFO: But first, let's roll back and recap what's happened thus far. Dan, give us the lowdown.

DAN HOWLEY: That's right, Rachelle. The tech industry is reeling from a seemingly nonstop parade of layoffs across Silicon Valley and beyond, and we're not talking small numbers either. Amazon cut 18,000 jobs. Alphabet laid off 12,000 workers, and Meta let go of 11,000 employees. Microsoft, meanwhile, slashed 10,000 positions, and those are just the major announcements.

So it's important to put those layoffs in perspective. Compared to the massive number of employees they hired during the pandemic, big tech companies have cut a relatively small number of jobs.

So why are we seeing these layoffs? Well, the macroeconomic situation isn't helping, but each company has problems of their own. Google is dealing with slowing ad sales. Ditto Meta, though that company is also pouring billions into its risky metaverse bet. Microsoft has to contend with slowing PC and cloud sales, and Amazon just can't get enough people to buy things from its stores.

RACHELLE AKUFFO: I mean, it's interesting because when you break it down-- we hear tech layoffs, but as you were saying, there's a lot of nuances there within some of these companies. And given how much they did over hire during the pandemic, you have to wonder how much more we might see in terms of cuts ahead. And notably Apple not also on that list as well, Dan.

DAN HOWLEY: Yeah, they're seemingly the only one that doesn't have to do any layoffs. There's been talk about how they were very, very easy on hiring during the pandemic. So they didn't go out and say, look, this is all going to change the world entirely. We have to staff up super quick. That's basically what Amazon did. They nearly doubled their workforce.

But they went slower. They figured, look, we sell devices. We know that there's demand for devices. We're going to continue to provide those devices, but we don't need the headcount to do that. They already put out more than enough handsets.

In fact, for Apple, it was almost a different problem because they were dealing with a chip shortage. So because they are a hardware-sales company, they had to contend with that side of the pandemic, not necessarily the staffing-up issue. So that seems to be why they were able to move through this time of layoffs relatively unscathed. Yes, there are some hiring slowdowns, but we haven't heard anything about layoffs.

RACHELLE AKUFFO: Indeed we'll be keeping an eye, although they do have hiring freezes. But as you mentioned, they're not layoffs at the moment.