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US tech labour market will be selectively tight

Monday, February 6, 2023

Significance

This was about 40% of the number in November, when Meta became the first ‘big tech’ firm to trim the over-hiring of the pandemic period and reassure investors that it was cutting costs to improve profitability. Yet even this scale of lay-offs accounts for only a small share of the tech workers taken on since the pandemic started.

Impacts

  • Venture capitalists are pivoting to fund firms focused on permanent post-pandemic changes, implying that lay-offs will hit other start-ups.
  • Non-tech jobs at tech firms are the most vulnerable.
  • Severance payments account for nearly half of big tech’s USD10bn fourth-quarter restructuring charges, real estate for most of the rest.
  • Job cuts may not revive faltering efforts to unionise the tech sector for as long as labour markets remain tight.

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