Mass tech layoff could spell disaster for Seattle
On the Gee and Ursula Show, host Ursula Reutin and guest host Spike O’Neill talked about the layoffs and what could have caused such a large shift in the tech industry.
“This is a natural, inevitable consequence of the last three to four or five years, when the pandemic hit and everyone shut down, the economy collapsed, and the government did what they had to do. Made money free — nearly 0% interest for these huge companies — coupled with the fact that people were able to work remotely, which lends itself to all tech occupations,” Spike said. “It was an inevitable explosion of tech growth, free money to expand the companies, the ability for anybody they hired to be anywhere to do the jobs they need done. But as we come out of our pandemic reality into our real world reality, these companies are over-expanded and oversized.”
This causes a secondary issue, as the companies contract, they continue to cut costs through the reduction of labor, but that also reduces the amount of money going into the local economy. Ursula compares this to when The Boeing Company laid off 62,110 employees in the early 70s, causing one of the worst recessions the city has ever seen.
“Think about if we were talking about Boeing, do you remember? When Boeing had to let people go, it impacted the community and tribemates definitely,” Ursula said. “If you even heard that Boeing was cutting 1,000 employees, you’d be like ‘gasp.’ Do we have a different reaction because it’s tech workers?”
Matthew Gardner, Chief Economist at Windmere Real Estate, thinks the reason so many companies are reducing staff is because of a lack of clarity on the direction they will be heading in the immediate future. This is partly due to the change from fully remote work that started at the beginning of 2020 with the COVID-19 pandemic, but now employers are trying to get staff back in the office.
“I think where a lot of companies right now are in that period is they’re not sure if they’re going to expand or how that’s going to look, and that’s really based on working remotely. And so companies are not quite sure what direction they’re going to be going,” Gardner said. “We’ve certainly seen a slowing in hiring mainly because of the expectation that we can have a recession next year, which I believe will be the case. So people tend not to grow that much.”