In This Article:
Big Tech companies laid off hundreds of employees in recent days, commanding headlines and confronting workers across the economy with a question: Am I next?
Amazon and Google each imposed cuts, with Apple shutting down a 121-person team in San Diego, Calif., telling workers they must either transfer to Texas or leave the company, Bloomberg reported.
In all, the tech sector has laid off nearly 8,000 workers so far this year, according to layoffs.fyi, a site that tracks tech-sector employment.
The job cuts stem in large part from an ongoing staff reevaluation specific to the tech industry, since sales have retreated from the blistering pace attained during the pandemic, analysts said, noting comparatively scant layoffs across the wider workforce.
However, the recent cutbacks in tech also are due to the rise of artificial intelligence and the persistence of high interest rates, some analysts said, foretelling similar risks for workers across major swathes of the economy.
MORE: Bank overdraft fees may soon plummet. Here's what to know.
"I could see some layoffs in other areas of the economy but not as widespread as we're seeing in tech," Joshua White, Vanderbilt University finance professor and former economist at the Securities and Exchange Commission, told ABC News.
The string of high-profile job cuts arrives at a time when employment in the wider labor force remains robust.
A stronger-than-expected jobs report demonstrated solid hiring growth in December, rebuking fears of a shrinking workforce anytime soon, according to data from the U.S. Bureau of Labor Statistics (BLS).
The layoff rate for November, the most recent month on record, stands at a near-historic low of 1%, according to BLS data.
Even the job cuts in tech are relatively small compared with tens of thousands of employees laid off at the outset of last year.
This resilience in the labor force has coincided with a prolonged period of high interest rates at the Federal Reserve, which typically slow the economy and increase the risk of job cuts.
"Layoffs and firings are unusually rare throughout the economy," Julia Pollak, chief economist at ZipRecruiter, told ABC News. "It's surprising to me that employment hasn't fallen more."
Still, the job cuts at Big Tech firms could portend layoffs in other sectors, since the wider economy remains vulnerable to disruption from artificial intelligence, as well as from losses induced by high interest rates, some analysts said.
Layoffs at Google, for instance, affected hundreds of workers focused on the company's well-known products, such as Google Assistant, as well as Google-owned YouTube.