Layoffs at “Big Tech”: The clear cut also hits New York

12,000 jobs will be lost at Google, 10,000 at Microsoft, 18,000 at Amazon: the job cuts in the tech industry are also affecting New York. The metropolis – analogous to Silicon Valley – dreamed of “Silicon Alley”.

“I’m still shocked by what Google did to us,” says software developer Kelly. In front of the Google headquarters in the Chelsea district of Manhattan, she and other members of the Alphabet Workers union show their solidarity with their 12,000 fired colleagues. Kelly tells of a colleague who had just grabbed a coffee from the canteen when she found out about her dismissal via email.

Job numbers down, share prices up

“I wasn’t even allowed to go back to my workplace to get my things” – while Kelly is reading out the anonymous statement from her ex-colleague, who was sentenced to silence, the share price of the Facebook parent company Meta, not far from the Nasdaq technology exchange, is heating up the recovery rally of the tech values.

The wave of layoffs has inevitably begun, says Scott Kessler, analyst for the tech industry at the research company “Third Bridge”: interest rate hikes, inflation, recession. “Big Tech” has been thrown back from the bubble to the bottom of reality. “These companies have been hiring far too many people at breakneck speed over the past few years,” says Kessler.

Alphabet, Meta, Amazon: In the competition for talent, the corporations have inflated their staffing levels over the past four years. Almost all giants have doubled their workforce. Then Amazon and Microsoft initiated downsizing – and the whole tech herd followed suit. Since the beginning of the year, around 240 companies worldwide have laid off around 78,000 employees.

Big real estate purchases before the pandemic

The deforestation has also hit Manhattan, says economist and tech expert Arun Sundararajan from New York University. After all, “Big Apple” has long since become the center for “Big Tech”. “Maybe not with the density of the San Francisco Bay,” says Sundararajan. “But right behind in second place.”

Before and during the pandemic, the industry moved into huge real estate in the metropolis: Facebook rented almost the entire former post office building in Manhattan. Apple secured the former headquarters of the Macy’s department store. And Google bought a whole block for two and a half billion dollars. Now it’s going backwards, says Sundararajan: “Meta is closing a few offices it just opened in New York, and Salesforce.com is likely to close some as well.”

But the lights would never go out completely in “Silicon Alley”, the tech alley that New York presents itself as. “So many companies still start here. Tech has become one of the biggest businesses in the city. The setbacks haven’t stopped the development of the last ten years,” says industry insider Sundararajan. The economist estimates that the industry will find its way back to growth in 2024.

The balance of power is shifting

But one thing has changed since the pandemic, says analyst Kessler: the balance of power. “Now the pendulum is swinging back from workers to employers,” he predicts. “They are calling the shots again after having to make a lot of concessions to keep their talent in the boom.”

“How do we ensure that such mass layoffs don’t happen again?” asks trade unionist Alberta at the demonstration in front of the Google building. But experts say: not at all. Because the investors in the companies want to see even more slimming down so that the share prices continue to rise.