Tech layoffs are making headlines and causing people to rethink their views of the industry. It’s difficult to read the news or browse platforms like TikTok, Instagram and Elon Musk’s Twitter without hearing about massive cuts at big companies that were once thought of as “layoff-proof.”
Many of the companies that have announced layoffs are still profitable, but they were unable to compete with the price wars fueled by investors and a weakened labor market. The influx of new employees has also created a glut of talent, which is driving down salaries. This has led to some workers feeling resentful and anxious about their work, and even their place in the industry.
According to the authors of a study on layoffs in tech, once layoffs become routine, they can have a corrosive effect on culture. When employees anticipate that they may be laid off on a regular basis, it changes how they interact with each other and how they approach their jobs. They stop mentoring colleagues and challenging bad ideas, which can ultimately degrade company culture.
This change in perception can have a ripple effect on the tech industry, which may impact employment rates and the commercial real estate markets of major cities. It could also lead to a decline in the number of new technology startups, as large firms are less likely to take on risks when they can’t guarantee their existing workforces. This could have a negative impact on the economy overall, which is already in the midst of a slowdown.