I know lay-offs seem to be happening a lot, especially in tech right now, and can happen at any point – but just this month there has been Microsoft, Discord, Twitch, Google and RIOT lay-offs to name a few, and I’m sure many others.
Unless it’s just coincidence, why do these lay-off announcements seem to be like a chain reaction? I’m guessing that there must be economical reasons as to why, such as boosting numbers before a certain reporting season? Or is it just to stay competitive in terms of profit margins?
In: Economics
Multiple reasons:
1. They are reacting to the same economic environment (end of quantitative easing, rising interest rates, reduced frivolous spending by consumers and businesses).
2. They are on the same fiscal calendar, and need to boost their quarterly or end-of-year numbers at around the same time.
3. Shareholders see a competitor doing layoffs and increasing margins and demand their company do it as well.
4. They are piggybacking off each other to lessen the bad publicity.
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