While Big Tech layoffs might seem like a bad sign for what's in store, data indicates that this firing trend isn't impacting the labor market in a larger sense.
Meta, Amazon, and Twitter have all made major cuts in the last couple of months, according to CNBC. Meta fired more than 11,000 workers in early November, and Elon Musk has been notorious for his firing habits since taking the helm of the social media website Twitter. And Andy Jassy, Amazon's Chief Executive Officer, wrote in a memo last month that the rapid hiring spurt of 2021 is creating problems for the titan.
A report from Challenger, Gray & Christmas showed that 76,835 jobs were cut in November, with the tech sector leading by far. However, job cuts were still the second-lowest since the firm began tracking this data in 1993, which means that these layoffs may not be such a bad omen after all.
"I do think what's happening in the tech sector isn't really representative of what we're seeing in the overall economy right now," Nick Bunker, Head of Economic Research at the Indeed Hiring Lab, told CNBC. The rate of layoffs is lower now than it was between 2017 and 2019, which is considered an era of economic strength, Bunker continued.
As for why the tech industry is suffering the most, the cause, according to many experts, was pandemic-era hiring. CNBC refers to hiring trends over the past couple of years as "overzealous." Even Mark Zuckerberg, billionaire and Meta CEO, told the public in a statement that he predicted that the pandemic hiring boost would keep momentum and create "permanent acceleration" — but that turned out not to be the case.
That being said, job openings are numerous, especially in the tech field among white-collar and knowledge workers. The job market is uncharacteristically strong, says Daniel Zhao, Lead Economist at Glassdoor, and if Big Tech doesn't want available talent, smaller tech firms certainly will.