Large-scale layoffs in the Technology sector continue in 2023 amidst rate hikes and companies’ cost-cutting measures
The technology sector, which is leading all industries, is witnessing a high number of layoffs this year. According to a report by Challenger, Gray & Christmas, Inc., technology companies have announced 102,391 cuts so far this year, up a whopping 38,487 percent from the 267 cuts the sector announced in the first quarter of 2022.
This marks the third time this year when cuts were higher than the corresponding month a year earlier. The report further stated that the technology sector talent is in demand across industries, and 38 percent of all cuts are in the Tech sector.
Financial companies announced the second-most job cuts this year with 30,635, a 419 percent increase from the 5,903 cuts announced in the sector in Q1 2022. The healthcare/products companies and manufacturers, including hospitals, announced 22,950 cuts in the first quarter of 2023, up 65 percent from the 13,923 cuts announced in the same period last year. The media industry shed 582 cuts last month for a total of 10,320. Of those, 1,438 were in digital, broadcast, and print news.
Hiring plans in the US are also falling as companies approach 2023 with caution amidst rate hikes and cost-cutting measures. The report noted that hiring plans fell to 9,044, the lowest total for March since 2015, when 6,412 new hires were announced. So far this year, US employers announced plans to hire 70,638, the lowest Q1 total since 2016, when 26,898 new hires were recorded.
Companies approach 2023 with caution, despite the economy still creating jobs
The current economic environment is creating uncertainty for companies that are approaching 2023 with caution, despite the economy still creating jobs. Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc., stated that “with rate hikes continuing and companies reigning in costs, the large-scale layoffs we are seeing will likely continue.” The report shows that companies are reigning in costs by cutting jobs, and this approach is likely to continue in the coming months.
Technology sector on pace to surpass the highest annual total for job cuts
The number of job cuts in the technology sector is on pace to surpass the highest annual total for the sector announced in 2001. The report highlights that the only years during which Tech announced more job cuts than the current year are in 2001, when 168,395 cuts were announced, and in 2002, when 131,294 Tech cuts were recorded. This alarming trend in the technology sector is a cause for concern, and companies must re-evaluate their hiring and cost-cutting strategies to maintain their competitive edge.
In conclusion, the technology sector’s high number of layoffs continues in 2023, with financial companies and healthcare/products companies following suit. Companies are reigning in costs amidst rate hikes and approaching 2023 with caution, which is leading to a fall in hiring plans. The technology sector is on pace to surpass the highest annual total for job cuts, and companies must re-evaluate their hiring and cost-cutting strategies to maintain their competitive edge. This alarming trend is a cause for concern, and it is essential to focus on creating a sustainable and stable work environment that promotes growth and innovation.