Throughout the year, no sector bled more cash than big tech. According to CNBC, not one of the top 15 tech companies in the United States generated a profit in 2022. Wave after wave of layoffs in the industry made headlines throughout the year. So, why were there so many layoffs in big tech this year?
Big Tech collectively lost about $7.4 trillion, and layoffs were just as massive.
Microsoft alone lost around $700 billion in market cap this year. Recent reports show that the company will lose about $3 billion on its new cloud service, Microsoft Azure.
Additionally, the company loses between $100 and $200 for every Xbox Series X/S sold. Although according to Microsoft Gaming CEO Phil Spencer, they make some of that money back through the Xbox Game Pass.
Facebook’s parent company Meta is also deep in the red for 2022. The one-time social media king’s market cap shrank by over $600 billion throughout the year. In addition, CEO Mark Zuckerberg’s metaverse project Reality Labs hemorrhaged money for the company, losing nearly $10 billion in 2022.
Amazon became the world’s first company to lose over $1 trillion in market value by itself. Bloomberg reported in November that Amazon shrank from around $1.88 trillion in market cap to just under $880 billion. Nearly half of its overall value.
Although, no tech mogul made more headlines this year than Elon Musk. Tesla stocks are tanking amid his absence as CEO. And he’s made quite a risky investment in Twitter after his $44 billion takeover. Musk said on more than one occasion that the social media platform is on the fast track to bankruptcy.
How many jobs did big tech cut in 2022?
These companies’ wealthy executives can afford to take a few losses. But what about the rest of the staff? According to Fortune, tech companies laid off around 210,000 employees in 2022. Around 40% of them lost their jobs within Q4. In November, Meta laid off around 11,000 people. Amazon also laid off employees in the five-digit range, cutting about 10,000 jobs. Of the “big five” (Amazon, Meta, Alphabet, Apple, and Microsoft), only Google’s parent company, Alphabet, had no layoffs this year.
