Local tech layoffs nearing levels of 2008 recession
Dec 13, 2022, 12:22 PM
Photo from KIRO 7
New reports are signaling that the number of tech company layoffs this year is nearing levels from the Great Recession circa 2008-2009. MarketWatch said the layoffs are part of a strategy by tech firms to maintain viability through 2023 and beyond. The cuts are coming now, and are impacting many companies in Western Washington. We’ve already heard of cuts at Microsoft, Meta — the parent company of Facebook — and Twitter. Seattle’s status as a tech hub ensures the region will feel the impact — which is already being felt — as tech companies deal with the economic pressures that other companies are facing.
Seattle-based Amazon cut positions across the company — the bulk of those coming from their services and devices departments, like Alexa, Echo, and Fire TV.
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Meta announced that it would lay off 11,000 of its workers, which would make the cuts the largest in the company’s history. The company is laying off more than 700 employees in the Puget Sound region.
Microsoft has also announced job cuts, and several other firms in our region are doing the same. There have been signs for months that cuts were coming to Washington — the October employment report from the Washington State Employment Security Department showed that the information sector lost 5,900 jobs.
Muddu Sudhakar is the CEO of Aisera, an artificial intelligence firm with a focus on information technology. He said the cuts could worsen: “I think we’re just scratching the surface, ‘23 will be worse from what I am hearing from customers and CIOs (chief information officers).”
Sudhakar spoke to KIRO 7′s Ranji Sinha and said Seattle’s tech focus may help in the long run: “Seattle is a birth ground with Microsoft and Amazon and tech. I think it’s a great place, I think both Seattle and San Francisco/Bay Area will rebound. They may also be impacted because they’re concentrated in tech. You’ll have both the highs and the lows. … But Seattle will recover.”
Twitter’s layoffs are due more to Elon Musk’s takeover and revamp of the social media company — some industry analysts have questioned his move to lay off his employees. The impact here in Washington was tangible — Washington state officials said more than 200 local employees were included in the Twitter layoffs.
Sudhakar said some of these companies did hire a lot of people over the last two years that they perhaps they did not need, so we are seeing some of that being corrected with these layoffs.
Sudhakar added that a lot of companies may turn to AI to automate more functions to cut costs, freeze hiring and keep cash on hand. He sees many companies trying to firm up their cash reserves, so they will have 12 months to 24 months of viable cash on hand heading into 2023.
The MarketWatch report also noted that a lot of employees of tech firms — including here in Western Washington — often rely on employee sponsorship to maintain their H-1B visas if they are foreign workers. MarketWatch said a lot of those workers are being hit with the layoff trend.
