The tech industry is well-known for its lavish work environments, high salaries, frequent hirings, bonuses, stock ownership plans, generous perks, and lavish offices. However, it appears that the celebration is over as investment has dried up in the sector in light of the ongoing economic slowdown.
Investors were happy to shove billions of dollars into tech company founders’ hands because they saw the industry as unstoppable, recession-proof, and fail-safe. This led to reckless spending by startup leaders. These same tech entrepreneurs have eliminated that revenue source and are now unleashing widespread layoffs on their staff.
Salesforce, a cloud software provider; Lyft, a ride hailing company; Stripe, a payment processor; Zillow, a real estate aggregator; Microsoft, a content aggregation platform; Flipboard; Snap, a social media firm; Apple, Netflix; Twilio, a platform provider to build communication tools; Patreon, a subscription based platform for content creators; and Google have all laid off workers in 2022.
Silicon Valley’s 13-year love affair with prosperity is coming to an end as the tech industry’s utopian bull run cools down. ThePrint has chosen it as its Newsmaker of the Week because of this.
A year of wdespread job losses in the technology industry
This week, the macroeconomic climate prompted Meta, the parent company of Facebook, WhatsApp, and Instagram, to lay off 11,000 employees, including the entire apps division, the recruiting team, and the rest of the company’s management. In-Situ Experience Labs Organization that develops and studies AR/VR technology.
It’s important to remember that this was a corporation that raked in billions.
Nearly half of Twitter’s 7,500-person workforce has been furloughed since Elon Musk took control of the company in late October. Musk, the CEO of Tesla, reportedly said in June that he wants to stop hiring and cut the workforce by 10 percent due to “very bad feelings” about the economy.
For previously prosperous tech companies, that’s a devastating blow. Facebook achieved a $1 trillion market cap in 2021, making it the quickest company in history to do so. Tesla also joined the ranks of the fastest in that same year.
In India, funding for new technology companies is also drying up. Up until recently, a startup in the technology industry could raise billions of dollars from venture capitalists. We mined the internet and our data for precious gems.
There was free rein to make arbitrary hires and try out different approaches to hiring, product development, advertising, pricing, and rebate programmes. Investors were happy to put in billions more, so the motto of the game was “burn as much money as you want to get customers, spoil profits.”
Byju’s, an ed tech company, has a market cap of $22 billion, but the company has lost money since its inception and is currently Rs 4,588 crore in the red. Despite the losses for FY2021, which were disclosed in September of this year, Byju’s raised $250 million from investors. october,
The problem is that winter is approaching. 2,500 people will lose their jobs at Byju’s as the company attempts to turn a profit by March 2023. According to the ink42 news website for startups, a total of 44 Indian companies have fired 15,708 workers so far in 2018.
Venture capital, which is used to invest in high-risk businesses like unproven startups, is drying up around the world because of the Indian startup funding crisis.