Hey! This is a pretty big question. There are a few main factors fueling these layoffs, but the driving factor is that companies are trying to recover from their pandemic-fueled hiring sprees.

During the pandemic, tech companies were seen as way more valuable (on the stock market, with record-high prices) due to the sudden, virtual nature of everything. But now that people are increasingly in-person, their stock values (and thus their company values too) have gone down.

When things were really good at tech companies, they were paying top dollar for talent and staffing up at ridiculous rates. But they grew too much too quickly, so many are now downsizing.

But! Here’s the plot-twist — do these massive companies actually need to lay people off to become profitable? Probably not. But these massive cuts appease investors who are getting nervous about their investments not making them as much money.

To be ultra-clear, companies are still profiting. They’re just not profiting as much as Wall Street would like. So when one company is making cuts, it’s easier for other companies to justify doing so too.

Headcount change versus stock price change is a pretty good indicator btw of possibly predicting whether a company might cut headcount. I made this chart last year, but it remains a relevant metric: https://www.businessinsider.com/chart-shows-most-unsustainable-tech-company-compensation-plans-rsus-equity-2022-5?utm_source=reddit&utm_medium=social&utm_campaign=IAmA-comment

-DNS