New Delhi: Chinese smartphone maker Xiaomi has laid off more than 900 employees. According to a report in the South China Morning Post, the company has laid off about 3% of its employees amid the economic slowdown. Although Xiaomi has not confirmed this. Due to the fear of recession, big tech companies like Apple and Microsoft have also fired some of their employees.
The United States, the world’s largest economy, is also grappling with lack of growth and fears of recession. Inflation here is at a record level of 40 years.
32 thousand tech workers fired
As of July, more than 32,000 tech workers in the US have lost their jobs, according to compiled data from Crunchbase, a platform that provides information related to public and private companies. Companies that fired employees also include companies like Microsoft and Meta.
LIkewise, according to layoffs.fyi, a website that tracks layoffs in startups, since April 1 this year, more than 43, 000 employees of 342 tech companies / startups have been fired from jobs across the world.
Apple, Microsoft layoffs
A Bloomberg report claims that tech giant Apple has fired 100 contract-based employees in the past. These employees were in the HR department and the job of recruiting new employees was with them. According to people familiar with the matter, Apple has taken this decision to control the expenditure.
The report further states that one of the reasons for the layoffs is the change in Apple’s current business requirements. Apart from this, like other companies, Apple is also afraid of recession. In the past, Apple had said in its earnings call that it is cautious about its spending. From this statement it seems that the company is trying to save money by firing some employees.
More recently, Google said that it is going to slow down the hiring process. Google CEO Sundar Pichai had said – the company has many employees, but the work is very less. Microsoft has also laid off more than 2,000 employees. Companies like Netflix, Shopify, Coinbase and Alibaba have also laid off employees to some extent due to cost cutting.
Google’s profits fall
Google’s parent company Alphabet’s profits declined for the second consecutive quarter (Q2 2022). Alphabet reported profit of about $16 billion during the second quarter of 2022, up from $18.5 billion during the same period last year.
The reason for the decrease in the profit of the company is its high expenditure. This is because the company’s revenue has increased in Q2 2022 as compared to Q2 2021, but profit has decreased. The company’s revenue for the quarter stood at around $69.7 billion, up from $61.9 billion in the third quarter of last year.
Google is spending about $3 billion more on both research and development and sales and marketing than in 2021. In terms of headcount, Google had 144,056 employees in Q2 2021. This number increased to 174,014 in Q2 2022.
Facebook’s revenue declined for the first time
Facebook’s parent company Meta has faced a double whammy in the past three months. For the first time, its revenue declined and profit declined for the third consecutive quarter amid increasing competition from Tiktok and panic of advertisers.
Mark Zuckerberg, the company’s CEO, said, “It appears we have entered an economic downturn that will have an impact on digital advertising. ‘I would say the situation looks worse than it did a quarter ago.’
US companies stop expansion
Companies are halting their expansion amid concerns over inflation, a slowing economy, recession fears in the US and Europe, and the Ukraine-Russia war. Some companies, including Meta, Twitter and Tesla, have also slowed hiring amid uncertainty in the US market.
According to an August report by staffing specialist Xpheno – Facebook, Apple, Amazon, Netflix, Microsoft and Google had total active openings below 9,000. These six companies usually have more than 40 thousand active job openings. In view of the global trend, these companies have stopped hiring in India as well.
No impact on other industries
Hiring cuts in the tech sector in the US have yet to impact hiring in other industries, which remain red-hot. The US economy added 528,000 jobs in July. Some analysts believe that layoffs in the tech sector do not mean a massive hiring slowdown.
Indian startups layoffs
Indian startups have fired around 12,000 employees in the first 6 months of the year. By the end of the year, this number can reach beyond 60,000. Ola, Blinkit, Byju’s, Unacademy, Vedantu, Cars24, Mobile Premier League, Lido Learning, MFine, Trail, and many others have laid off thousands of employees so far this year.