Do Tech Layoffs Mean Anything?

by | Dec 1, 2022 | General

Tech is always in its own world

Several large tech companies have been making headlines about layoffs. They’ve used lots of scary language about recessions and upcoming weakness. Meanwhile, jobless claims and employment figures for the economy as a whole do not show any such weakness or caution. 

This chart from Goldman might help show why there’s such a divergence between what tech companies are saying about jobs, and what everyone else is experiencing: tech companies often hire and fire in waves unrelated to other industries.

The blue line shows announced tech layoffs. The black line shows the total US job layoffs. Tech job losses move around a lot, even when we’re not in a recession. Total US layoffs are less volatile.

Our take is that many tech companies went on a hiring binge during the pandemic, and not all of those employees are productive. Tech turnover is business as usual. 

Best regards,

Evan McGoff

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