5 Critical Reasons Why IT Companies Are Firing Thousands Of Employees
For weeks now, en masse layoffs in major tech companies have made the news on a near daily basis.
Companies cite cost cutting reasons along with a poor economic climate behind their moves.
But is that all?
The pandemic was a blessing in disguise for tech companies who could take advantage of a large consumer base in lockdown who were spending much of their time online.
Following this upsurge, firms rushed to increase their output to meet the market requirements.
Over Hiring During Pandemic
This is another major reason that can be attributed to the pandemic.
Many companies went on a hiring spree in order to meet demand in anticipation of the pandemic boom to continue even beyond.
However as curbs were lifted and people began to venture out of their homes again, consumption fell, resulting in heavy losses.
Some of these resources were hired at a higher cost because of the sudden upsurge in demand.
Fear Of Recession
Now that demand is returning to pre-Covid levels and the debt bubble appears close to bursting on top of recession fears, these companies are cutting costs to cut their losses.
Some measures they are taking include closing down low-performing projects and laying off the excess and high-cost resources they hired to accelerate growth.
Geopolitical tensions stemming from Russia’s invasion of Ukraine has spooked the economy further, leading to layoffs as it has made the market more volatile.
An unrelenting inflation has worsened matters.
By impacting world economies it has led to a crisis in the job market.
It’s anyone’s guess as to when global economies will be able to pull themselves up and return to normalcy.