Technology Layoffs: Has the Recession Come to an End?

In the first half of 2023, IT businesses laid off about 300,000 workers due to the looming recession. Bernstein technology analysts have been keeping track of monthly employment cutbacks in the industry. Bernstein Research's technology experts have released monthly updates on layoffs throughout the industry for over a year. However, they formally discontinued the data series this week.

Layoffs in the last months

According to Trueup.io, statistics indicated 4,937 tech job layoffs thus far in August. If the month continues at its current pace, there should be around 11,000 layoffs. That is much lower than the first six months of this year when there were over 300,000 job losses in technology, or approximately 51,000 each month. "The Tech Job Recession is Over," Bernstein analysts stated in a note to investors last week. "Layoffs in technology have slowed to a trickle." When will hiring begin to pick up again?"

Employees are being rehired

Thank OpenAI and the generative AI explosion for keeping the bloodshed to a minimum. AI firms have raised billions of dollars this year, and when they're not hastily purchasing Nvidia GPUs, they're hiring engineers and other AI professionals. On Tuesday afternoon, for example, OpenAI's recruitment website advertised 60 available positions. Most major technology firms have also paused layoffs, and several have even begun to rehire employees who were let go only a few months ago.

Meta eliminated 25% of its personnel in many waves of layoffs that culminated in May. Insider has revealed that scores of those people had been rehired, primarily since June. In January, Amazon laid off 25,000 workers. By February, AWS HR VP Ian Wilson informed employees that the business was looking at methods to rehire some of the laid-off employees.

Does technology do well in a recession?

The good news is that technology companies are usually among the first to jump into a fresh bull market. That's because a recession frequently drives the Fed to decrease interest rates, and lower rates help tech stocks outperform because increasing interest rates cause them to underperform.

How long will the 2023 recession last?

Earnings Recession in 2023, followed by a Strong Recovery in 2024. Morgan Stanley Research analysts believe corporate earnings in the United States will fall 16% in 2023 before recovering in 2024 and 2025. 

Which industry will see a recession?

Another industry that is likely to be affected by an economic downturn is retail and trade. Retailers may need help when consumers change their shopping habits online and towards experiences rather than things.