A review of the tech layoffs around the industry

I was gone last week covering two conferences, and while catching up to find the items we care about, two stories emerged that I wanted to address first.  

First, let’s talk about tech layoffs.

Meta announced eleven thousand job cuts, which is 13% of its workforce.      Lyft cut 700 jobs, Stripe cut 14% of its staff, and Twitter cut half its workforce.    Salesforce is cutting 1,000.  

Within the MSP space, Gradient MSP laid off 20 people.   MSP SADA cut 11% of jobs.

Amazon is expected to lay off 10,000 employees (although it currently employs 1 million, so it’s a small percentage).     All told, 120,000 tech workers will be laid off in 2022. 

I want to dive into the how.    Meta’s Mark Zuckerberg leaned into taking responsibility for the layoffs, and severance packages start with 16 weeks and include extra time for service.      More importantly, he took responsibility for misjudging the market conditions, anticipating that the pandemic change in customer behavior was permanent when it wasn’t.

Contrast that with Musk’s brutal layoffs at Twitter, done in emails, with such aggressive cuts that some employees were then asked to come back.   Dig into this process – most of it was cruel.  

In the middle would be Gradient, where CEO Colin Knox explained the layoffs as a change in strategy and then indicated that the company was “stronger than we could’ve hoped.”.  Here, the wording was polished, yet there was little ownership of the choices, which resulted in overstaffing for the current and upcoming climate.   There was no “I’m sorry.”

Two lessons:

In every case, these changes are necessary to shore up the companies for uncertain economic times, and that’s reasonable.     This is personal for those who lose their jobs, and ex-employees take that hurt with them.   How that transition is done is a judgment on the leadership, which future employees may weigh.

Second, most of these layoffs are not actual technology companies.    Lyft is a transportation company.   Stripe is a payments company.  Twitter and Meta are social media companies.    Don’t misread the disruption in so-called tech as impacting technology workers.   They happen to be technology people in other industries.     The data shows that the job market is tight overall, with the jobless rate at 3.7%.     So customers won’t feel this, and in my mind, neither will technology services companies.   That market is still tight.