Yahoo Finance tech editor Dan Howley explains what’s behind all the recent tech layoffs and what it means for some of the Nasdaq’s biggest companies.
SEANA SMITH: Welcome back to “Yahoo Finance Live.” The big-tech hiring spree during the pandemic has come to an abrupt end. Now a number of big tech companies, including Google, Microsoft, Salesforce, are cutting jobs. More than 68,000 have been cut from the industry just since the start of the year.
Tech reporter Dan Howley joining us now with a closer look. And, Dan, you’re taking the position that this is a problem of big tech’s own doing.
DAN HOWLEY: Yeah, that’s right. And as you said, the 68,000 jobs lost in the industry since the start of this year. 240,000 jobs lost since the start of 2021.
And if you look at how these companies staffed up and the kind of thinking that was behind that staffing, it really does seem like it is their own fault. You know, they’ve talked a lot about how there’s been different changes to the economy, microeconomic– sorry, macroeconomic conditions, rising interest rates, inflation, everything from the gamut of excuses that you hear regularly from companies.
But the difference here is these companies looked at the pandemic and seemed to think that that was the way life was going to be forever, that we would continue to just remain perpetually online. We wouldn’t go to brick-and-mortar stores. And so they staffed to that line of thinking, and now they have to kind of pull back as far as the number of people that they have on staff.
We’ve had companies including Microsoft, Alphabet, Meta basically saying, look, we miscalculated on this. Amazon as well. They staffed up in their data centers. They went ahead and built out more– sorry, in their fulfillment centers. They went ahead and built more fulfillment centers or tried to. Now they’re trying to lease some of that property out to third parties.
So, you know, this has– this has been a problem that we’ve seen across this industry. The only holdout, though, appears to be Apple at this point, which, you know, didn’t need to staff up as much or didn’t staff up as aggressively. And so they’re not dealing with any layoffs at this point, at least.
DAVE BRIGGS: Now, this might be difficult to measure because a lot of these layoffs, Dan, are very fresh, but do you get a sense of where these workers are going, and are they getting hired in a short period of time? That is what, no doubt, Jay Powell is watching.
DAN HOWLEY: Yeah, I think that’s something that– what’s interesting is when we talk about the tech industry, you know, the thinking is it’s all Silicon Valley, right? But the reality is that these jobs can go into any sector. Every sector of the, you know, economy needs people who understand tech. You don’t necessarily have to work for Google or, you know, Meta or Amazon to be part of the tech industry.
So these are jobs that can be easily moved– relatively easily moved to other areas. And so, you know, as we’ve seen, the layoffs to the broader job market haven’t been exactly overwhelming. I think one stat said that it’s less than 1% of the total workforce.
So, you know, there’s still opportunities out there. There are still companies hiring. Even the companies that are doing layoffs are still hiring, just in strategic positions that they think are most important.
So, you know, one of the areas that a guest we spoke to last week had pointed to was cybersecurity. There’s still, you know, thousands and thousands and thousands of openings, and the need there is very real for employees. Yes, it’s different from working in cybersecurity to perhaps working on a web page but the idea being that, look, the tech industry is hurting for sure in these areas as a result of this, you know, fundamentally flawed thinking that these companies had, but there are other parts of it that are still thriving and doing well and, in fact, need to hire desperately.
DAVE BRIGGS: Big story. Dan Howley, thanks so much.