Retrenchment in the technology industry; How the brilliant era led to a bloodbath for employees?

The spread of the corona virus has disrupted many industries, killed a significant number of people and caused severe economic problems, but technology companies and especially online businesses have experienced a sudden increase in income. A number of technology executives predicted that the revenue growth trend would continue, but financial reports show that the revenue of most companies has fallen.

With the decline in the income of technology companies, layoffs have started. Twitter a week after signing a contract with Elon Musk fired half the staff and Mark Zuckerberg In recent days, it has announced the dismissal of 11,000 people from Meta forces. Salesforce, Stripe, Snapchat, Netflix, and even Oracle have laid off significant numbers of employees.

The end of the pandemic, the increase in interest rates and the rise in inflation ended the good days too soon

According to the page Tech Insider On Instagram, Meta has laid off 13% of its staff and said it will give them 16 weeks of base pay. Meta employees continue to receive health insurance and a number of other services for up to 6 months after dismissal. At the same time, Twitter has said that the bonus for the termination of service will be equivalent to 12 weeks of basic salary. Stripe plans to pay laid-off employees 14 weeks of base pay.

The mentioned companies operate in different fields, but they have one thing in common: the increase in demand for digital services and products during the Corona epidemic caused these companies to grow rapidly, but at the same time, a combination of returning to normal conditions, increasing interest rates and rising inflation caused The good times have come to an end too soon.

to report Business InsiderAt the beginning of the corona virus epidemic in 2020, many activities were transferred to the online space, and with the increase in spending in the e-commerce industry, the income of companies experienced a significant growth. Many people predicted that the growth rate would continue even after the pandemic ended. Mark Zuckerberg says he expected the same, and that’s why Meta’s investments increased, but in the end things didn’t go as expected.

Zuckerberg wasn’t the only high-profile tech executive with an optimistic view of the future. “In today’s world, we are overstaffed,” Stripe’s co-founders said in a memo to company employees. Stripe eventually laid off 1,000 employees, 14 percent of its workforce.

The current state of the technology industry raises an important question in our minds: How did the industry’s top executives, who are smart people and capable business leaders with access to vast amounts of valuable data, make such a wrong prediction about the future?

Back in the heyday of the tech industry, few thought things would change

If we look at the story fairly, we must say that the predictions of the managers of the technology field were not so unreasonable. In the early days of the corona pandemic, a number of companies temporarily stopped hiring new staff and retrenched some of their forces because they were afraid that the chaos caused by the pandemic would paralyze the economy.

A few months after the start of Corona, an investment company warned startups in a note about the difficult days ahead: “It will take a significant amount of time, perhaps several seasons, to make sure that the virus is contained.” The recovery of the previous conditions of the global economy will require a longer time. “Some of you may experience reduced demand and others may experience supply chain challenges.”

In practice, everything went against the initial expectations. People spent more time and money shopping online, video watch time on YouTube and Tik Tok skyrocketed, and video game revenue soared. As a result of these events, billions of dollars of revenue were injected into the technology industry.

Startups began to attract huge amounts of capital and the value of shares of technology-oriented companies grew exponentially. Even the personal computer industry, which had faced a decline in sales for years, prospered; Because people needed new laptops and desktop computers for remote work. In the first months of Corona, it was impossible for many to get a new computer, because the stores were empty.

The state of the technology industry was so good that few thought of a sudden change from the bright days. Thanks to low interest rates, high product prices and access to talented workers as a result of increased remote work, the technology industry experienced a historic transformation. Leaders such as the CEO of Oracle have begun to praise video conferencing tools like Zoom, calling them a “vital service” for telecommuting. The number of users and the amount of Zoom’s income during the Corona epidemic made headlines many times in the technology media.

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Despite all this, analysts believe that at the same time, a series of evidence showed that the bright days were not going to last long. About a year ago, Zoom’s financial report showed that the platform’s growth rate was much lower than Wall Street’s forecast. This event initially showed that vaccine access and reopening of workplaces are returning the situation to the pre-pandemic era. In the summer season of the company Roblox said it expects to be loss-making for several seasons.

Technology still plays a prominent role in everyday life, but unlike in recent years, it is not the most important element of our lives.

Leaders like Mark Zuckerberg started investing as if the tech industry had undergone an irreversible change. Apparently, the executives of the technology industry had forgotten an important truth: nothing lasts forever.

Tech companies’ gambling during the pandemic has left thousands of tech workers out of a job and struggling with unemployment as the cost of living skyrockets. A number of these employees are not American and are at risk of deportation from the United States.

It’s heartening that tech executives are taking responsibility for their mistakes, but these same smart leaders took naive actions during the pandemic, and the consequences of those actions have directly affected their employees.

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