Low tech investment worsens job losses – Report
TECHDIGEST – Uncertainty in the global technology sector has continued into 2023 with 123,882 tech workers sacked this year.
layoffs.fyi, a global tech layoff tracker, disclosed that as of March 4, 2023, 453 tech firms had laid off 123,882 employees.
According to the organisation, this represents 76.75 per cent of the 161,411 tech employees that were laid off in 2022.
In 2022, 1048 tech firms laid off 161,411 employees following an economic downturn, falling revenues, and rising inflation.
Last year, major tech firms such as Meta, Twitter, and Amazon led the layoff pack.
In Africa, Jumia has sacked 900 employees to lead tech firms that have laid off employees this year.
According to the firm, sacking 900 of its current employees would allow the firm to save 30 per cent.
It explained, “We expect these headcount reductions to allow us to save over 30 per cent in monthly staff costs starting from March 2023, as compared to the October 2022 staff cost baseline.
“The implementation of these organisational changes resulted in $3.7m in one-off restructuring costs booked in the fourth quarter of 2022.”
Since its pandemic boom, the global tech sector has had to grapple with an economic downturn and reduced revenue.
Also, rising global inflation and interest rates have impacted funding in the sector.
The Tech industry’s growth potential was affected by an economic recession, as documented in a recent counterpoint report.
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The new year has ushered in a wave of layoffs. Already firms like Microsoft have announced plans to sack 10,000 workers (about five per cent of its workforce).
In January, Amazon announced plans to lay off 18,000 workers; Zoom plans to cut 15 per cent of its workforce; PayPal plans to cut 2,000 full-time employees; and Alphabet Inc. announced 12,000 job cuts.
Since the peak of the COVID-19 pandemic, the global tech industry has lost $7.4tn of its value, which has led to reduced cost measures and growth projections. Global funding into the tech scene fell in 2022, and many tech firms are lowering their expectations for the year.
According to the Founder of Lendsqr and a trustee of Open Banking Nigeria, Adedeji Olowe, a lot of this is already happening in the US.
“Start-ups are struggling and laying off staff, and when this is happening, it mirrors what might happen here too. Because when start-ups here raise funds, they also raise overheads, and this is not sustainable without venture capital funds. Start-ups here are likely going to start laying off staff in a bid to cut costs.”
In an earlier interview with The PUNCH, he explained how work went remote as a result of the pandemic, and how digital services exploded.
He added, “A lot of companies, both big and small, faced a lot of demand. There was an increased demand for their services and a lot of people thought that the increased demand and growth will face an upward trajectory, so people over-hired.
“People also raised funds at a high valuation. Now that the world is normal, things are calmer, and reality is beginning to reset things. It was COVID-19 exuberance that caused people to over-hire. So, now people are shedding excess weight. Tech is still great, that is the truth, but both enthusiasm and economics are coming back to normal. The market will reset, and everyone will move on.”
