FEBRUARY 2023 IN
RICK ASTER’S WORLD
Technology companies are scaling back and laying off workers in what almost looks like a repeat of 1998–1999.
The trend was spearheaded by Twitter, which in three months has reduced staffing by 80 percent, but now it is hard to find a big tech name that is not participating in the layoff trend. Google, Meta, Amazon, Microsoft, Yahoo, Zoom, Disney, and Walmart are among the larger companies canceling technology initiatives and announcing staffing cuts.
More than 200,000 U.S. tech workers have been displaced or are about to be, but the unprecedented staffing cuts have not caused a surge in unemployment, which remains at historic lows. For the most part, workers are going to similar jobs elsewhere.
At YouTube, which stumbled badly after embracing the most toxic advertising trends of 2022, activity fell so much that the CEO was demoted. Staffing at YouTube, though, was reduced only in the same proportions as the rest of Google.
Much of the retrenchment is a reflection of the changing consumer, who are avoiding technology, screen time, entertainment, and shopping after having gotten too much of all of those things during the peak pandemic years. Consumers also seem to have become wary of how much their experience is shaped by the technology they interact with. The trend of trying to avoid excessive exposure to ads has expanded to a similar avoidance of the more manipulative forms of curated content.
Amazon is one company that is trying to adjust to this new skepticism. Stung by shoppers determined to avoid its search function, Amazon is trying to make the search more useful. With recent changes, the exact product or the product category that a shopper was searching for is more likely to appear in search results. Faced with a similar challenge, Twitter has taken the opposite approach, intermittently taking its search offline completely. Either way, the companies are trying to adjust to consumers who want what they want.
If there is a surprise in the latest burst of layoffs, it is how little it matters. There haven’t been many stories of workers having to learn skills or change fields. Aside from the slow-motion shutdown at Twitter, the major Internet services look relatively unchanged. In 1999, layoffs on a similar scale eventually led into a recession, but there is little sign of that currently. If it seems as though a few major e-commerce names will have to close, it is too soon to say which ones those might belong .
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