Meta, Twitter budget cuts and hiring freezes indicate economic downturn

Elon Musk is a walking headline right now. After his well-publicised US $44 billion purchase of Twitter in October, Musk has been on a rampage. 

Elon Musk is a walking headline right now.

After his well-publicised US $44 billion purchase of Twitter in October, Musk has been on a rampage. 

The tech magnate gave his staff at Twitter a Thursday deadline to commit to working “long hours at high intensity”. 

A 3-month severance package was offered for those employees who didn’t want to commit to Musk’s intense work demands. 

Then on Friday, it was reported that 1,200 Twitter employees had resigned, adding to the 3,700 that were laid off by the company in October. A mass exodus from a once thriving company.

This comes after Meta (formerly Facebook), announced a hiring freeze and complete restructuring at the hands of CEO Mark Zuckerberg. ² The company then laid off more than 11,000 employees earlier in November, which is a whopping 13% of Meta’s total workforce.

Indeed, Meta and Twitter joined other high-profile tech companies including Stripe, Coinbase, Salesforce, Zendesk and Tesla who each announced significant layoffs in recent months.  There were reportedly 9,587 job cuts in October, with Twitter and Meta adding to the pile in November. 

There are even reports that Amazon may cut 10,000 staff members, which would be the largest in its history, and these potential layoffs could continue until next year. 

One reason for the massive tech layoffs could be rising interest rates and lower consumer spending in the U.S. Another explanation could be a mismatch between managers and lower-end workers, with too many managers and too few workers, according to Jancko Associates CEO and business consultant, Victor Janulaitis. 

Even Jeff Bezos has given some sage advice on the state of the global economy. In an interview with CNN, the Amazon boss warned consumers to “take some risk off the table” amid economic uncertainty and the growing potential of a recession. 

Whatever’s behind the reason for these major budget cuts, another tech giant may be poised to take advantage of this mass exodus of tech staff: Apple. 

Job listings for positions such as software producers and senior engineers indicate that Apple is in need of highly skilled technicians to develop a VR headset reportedly in the pipeline. 

While the thousands of laid-off tech workers might spell an opportunity for other companies in the space to pounce on, this decimation of the workforce appears to be signalling a slowdown in economic activity as a downturn looks increasingly likely.

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