Global technology giants are in distress. Amazon, Meta, Twitter, Microsoft, Google, and Netflix have all announced major job cuts in the past three months. According to Challenger, Gray & Christmas’s report, the layoffs totalled to 97,171 for the year 2022.[1]
The layoffs in the U.S. tech sector have surpassed those from the recession of 2008.[2] The U.S.’ MAANG (Meta Platforms Inc., Amazon.com Inc., Apple Inc., Netflix Inc., Google [Alphabet.Inc] and China’s BAT (Baidu Inc., Alibaba Group Holding Ltd., and Tencent Holdings Ltd.) are the largest companies in market valuation globally.
As the pandemic recedes, these companies are starting to reduce the headcount that had been ramped up. The U.S. economy is in a near-recession, resulting in tech majors losing a combined market value of an estimated $3 trillion in 2022.[3] Similarly, China’s tech giants also lost over two-thirds from their peak values during 2022 – the combined effect of the three-year Covid lockdown on the Chinese economy and multiple crackdowns by Beijing on its tech sector.
While India’s tech startups are not comparable in size or scale to their global counterparts, they too face headwinds. During 2020 and 2021, these startups had raised record levels of venture and private equity funding which reduced sharply in 2022. Some of the leading tech companies such as BYJU’s and Zomato have also announced layoffs.
The infographic indicates the current market capitalization values and percentage change over a year as of December 31, 2022 (EOY), the MAANG companies, BAT companies and India’s Nykaa, Paytm and Zomato have experienced double digit percentage declines 50-75% from their peak value.[4]
Sarah Kropf & Srushti Jayawant are Interns at Gateway House.
Infographic designed by Debarpan Das
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References
[1] Challenger, Gray & Christmas, Inc., ‘The Challenger Report: Job Cuts in 2022 Up 13% Over 2021’, 5 January 2023, <https://www.challengergray.com/blog/the-challenger-report-job-cuts-in-2022-up-13-over-2021/>
[2] The Economic Times, ‘Tech layoffs surpass Great Recession levels, set to get worse in early 2023’, 21 December 2022, <https://economictimes.indiatimes.com/tech/technology/tech-layoffs-surpass-great-recession-levels-set-to-get-worse-in-early-2023/articleshow/96228747.cms?from=mdr>
[3] Patnaik, Subrat & Wittenstein, Jeran, ‘Apple’s slide topples last stock in $2 trillion club’, 4 January 2023, <https://economictimes.indiatimes.com/markets/stocks/news/apples-slide-topples-last-stock-in-2-trillion-club/articleshow/96724116.cms>
[4] Companies Market Cap, <https://companiesmarketcap.com>