Why tech layoffs are happening all at once — and why the next few weeks could be the worst of them
at the same time that companies are beginning to plan for the coming year. And with economic forecasts looking dire, tech firms are starting to tighten the belt — starting with cutting their workforces to shave salary costs.How did we get here
"When they cut costs, the first thing to go is typically labor costs and also advertising and marketing," Wang told Insider. "So when it comes to forecast what their numbers will look like, it'll depend on how they have seen the trend in advertising spending on their platforms. When that doesn't look good, then they have to accommodate those expectations by adjusting the workforces.
Amazon, Meta, and Google, for example, have fiscal years that end at the end of 2022 or in early 2023. They may be looking to get costs off their balance sheets now — before their fiscal years close. For example, if an employee is laid off now and given six weeks of severance, that reduces costs for the first quarter. Even if workers are given a longer severance, like three months, their salaries would be off the books before the end of the first quarter.
But in other ways, some companies may just be playing follow the leader: assessing economic conditions based in part on what other companies are doing, Gownder said.
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