Are Mass Tech Layoff a Sign of Recession in 2023?

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With large layoffs happening in the tech sector in the United States, many are speculating that we may be facing a global recession. However, experts have stated that layoffs in the manufacturing industry are a greater sign of recession. 


A large number of layoffs are not the only indicator of recession. The National Bureau of Economic Research(NBER) is a non-profit organization that is responsible for raising alarm in the event of a recession. The major indicators of recession for NBER include: 


  • Real income minus transfers 
  • Real spending 
  • Industrial production
  • Employment status




  • Am I going to lose my job? 
  • How can I avoid losing my job? 
  • What alternatives can I take in case I get laid off?
  • And more


However, the recession may be the least likely cause of these layoffs and the real reasons seem to be very different. 

More than 150,000 workers have been laid off by tech companies as 2022 ended and 2023 began. When Elon Musk took over as the CEO of Twitter, he’s said to have fired 50% of his staff. Meta, Alphabet, Amazon, and Microsoft together are said to have cut short their workforce by 50000. IBM cut off their staff by 3900 and SAP by 3000. 




  1. Mass Hiring During The Pandemic.
  2. Automating Manual HR Functions.
  3. Recession (May Or May Not Be One Reason). 


  • Mass Hiring During The Pandemic:


It’s not so shocking to know that an employee was laid off after two years by an organization. In fact, during the Covid-19 pandemic, huge hiring sprees were undertaken by these very organizations. They were providing competitive positions and exciting salaries to lure new employees in the pandemic era to have a better edge against their counterparts. However, once the situation turned back to normal, these excess employees were proved to be deadweight and were either laid off or furloughed to ensure a steady income for the companies.


  • Automating Manual HR Functions:


Once Microsoft announced the mass layoff of its 10,000 employees, it jumped to announce its intention to invest $10 billion in Open AI. It’s also largely speculated that Google is putting its efforts and investing in an AI search chatbot to compete with Chat GPT after it cut staff by 12,000. Interestingly, 28% of all of these layoffs happened within the HR sector. Thus, by laying off a mass number of employees, these tech giants could divert their payroll resources to further expand their processes and/ or create new products.


  • Recession:


Keeping all this in mind, layoffs are not the major indicator of recession but one can’t turn a blind eye to them. 


The unemployment rate is usually among the last indicators of a recession. This is because the other signs of recession play their roles to slow down the economy leading to consumers holding back from spending and causing companies to step up and fire their employees. 


As ADP’s chief economist Neila Richardson says, “Even if the U.S. formally enters a recession, “it’ll be the weirdest one ever, starting of with a 3.5% unemployment rate and where consumers, by and large, are in good shape and incomes have increased. It’ll be a different kind of recession than we’re aware of,” which are where consumers, by and large, are in good shape and incomes have increased. It’ll be a different kind of recession than we’re aware of,” which are “primarily driven by inflation and higher interest rates,”   




These sudden, shocking layoffs have left these departing employees in the worst phase of their mental and financial health. Searching for new jobs with good packages is not an easy walk to take. There are grey clouds of doubt and untrustworthiness looming over their heads with only a tiny glimmer of silver lining visible. 

The impact layoffs have on normal employees is grave. Rather than being solely focused on materialistic gains organizations and firms should adopt humane measures like disciplined hiring and sustainable growth.

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