The Big Boys Start to Cut — The wave of layoffs this year started with the easy prey—money-losing tech companies. Peloton, Carvana, and Zillow all had to shed staff to keep costs manageable amid an interest rate tightening cycle.
Now, the big boys are starting to cut back.
- Microsoft announced a round of job cuts this week, although it’ll be less than 1% of its workforce
- J&J is close behind after announcing upcoming layoffs in its earnings call
- Netflix, Tesla, and Coinbase have also reduced their workforces in recent months
A behemoth like Microsoft isn’t laying off workers due to liquidity problems. It just doesn’t make sense for them to keep the same number of heads with lower earnings.
This was the fear at the start of the hiking cycle—startup layoffs happen all the time, but if Big Tech started shedding workers in large numbers, it could be the spark that ignites a nasty recession.
Despite all the hoopla around layoffs, though, the unemployment rate still sits at a paltry 3.5%. Even though tech companies dominate much of our lives, much of the American workforce is employed doing other things.
Analysts are keeping their eyes on Apple, which has had a rocky relationship with its employees over RTO in recent months.
Sales of the new iPhone 14 are expected to be tepid, which may give it an opportunity to tell its workers refusing to come back to the office to take a hike.
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