Hyderabad: The biggest tech companies suffered enormous losses in 2022 as their market value declined by trillions of dollars. With layoffs coming into the spotlight, the fear of being laid off created pressure. This decline was attributed to a number of factors, including the disruption caused by the COVID-19 pandemic, Russia's invasion of Ukraine, and rising inflation resulting in higher interest rates, all of which caused investor anxiety.
What do the numbers say about the financial crisis?
Companies in a variety of industries, including semiconductors, social media, and cloud computing, lowered their future projections, reported weak development, and saw their stock prices decline. Seven significant technology companies, including Facebook, Apple, Amazon, Netflix, Google, and Tesla, had collectively lost over $3 trillion in market value by October. Google and Microsoft lost approximately $700 billion each, while Facebook, now known as Meta, lost $600 billion. Amazon became the first publicly traded company, not just a tech corporation, to lose $1 trillion in market value. Bloomberg reported on November 12 that Amazon's market value fell from $1.88 trillion to $879 billion, while Microsoft's market value also fell to $889 billion.
Impact of recession on IT industry
The falling numbers led to mass layoffs across different verticals around the world, including the tech industry. However, the industry is among the few industries that face an immediate recession. Technology companies in a variety of industries began laying off employees at a rate comparable to the initial impact of the COVID-19 pandemic on the global economy in 2020. According to estimates, the struggling technology industry eliminated more than 150,000 positions in 2022. This includes large companies such as the parent company of Facebook, Meta Platforms, which announced over 11,000 layoffs in November, as well as smaller businesses in the United States and other countries. The Indian IT services industry is a significant employer in the organized sector, and global economic trends are likely to impact their growth projections. Inc42 reported that more than 15,700 employees were laid off from Indian startups in 2022 as a result of stringent funding conditions.
How did the IT industry bounce back?
IT disruptions have led to the creation of pockets of tech departments in most industries. Despite unemployment and recession fears, elite tech talent is still in demand. Top-tier software developers will always be essential to tech. After layoffs, the best coders will have several opportunities. Tech layoffs made many think their jobs and skills were worth less. Companies will do anything to survive. And, software development remains valued. Agriculture, manufacturing, and retail – all value IT or tech talent. Big tech has made many sectors of the economy look for more tech-based talent. Job cuts let them hire the best. Software development is vital in technology. Developers provide software for all digitization and create practical applications.
Is AI revamping the tech industry?
The advent of AI has been a key turning point for the IT industry. Besides altering a handful of jobs and work processes, it also creates a list of opportunities. The World Economic Forum anticipates 97 million additional jobs by 2025 from technology. As AI spreads throughout industries, jobs in AI and automation development and maintenance will expand. Data detectives, scientists, quick engineers, robotics engineers, machine managers, and programmers, especially Python programmers, are needed for AI development. AI trainers and individuals with modeling, computational intelligence, machine learning, mathematics, psychology, languages, and neuroscience skills will also be needed. Furthermore, companies like Tesla, Uber, and Google are investing billions in AI-driven self-driving cars and trucks, creating jobs. Agile tech advancements, government schemes, skill-based hiring, a data-driven market, well-dynamic organizational policies, tech-literate employees, and an engaged audience is static elements supporting the survival and boom of the tech industry and jobs across the globe.
Author - Alisha Fernandez