These expectations prompted technology companies in the world to start taking measures that would enable them to face the “headwinds”. Under the heading “A necessary measure in these times”, companies such as Apple, Google and Amazon have begun to freeze hiring operations as a first stage, waiting for the image to clear.
On the other hand, other technology companies have decided to start directly with the layoffs of their employees, such as Snap and Lyft, with Twitter joining them by announcing the layoffs of 50 percent of their employees, as these steps come at a time when the International Labor Organization has warned that vacancies and employment growth will decline significantly during Fourth quarter of 2022.
Prepare for the worst
In the midst of this scene, economist and banker Bahij Al-Khatib said in an interview with “Sky News Arabia” that with the multiplicity of crises in the world and high interest rates and inflation rates, experts are likely to have a “stagnation” in 2023, and therefore we see that technology companies are forced to prepare for the worst, By reducing hiring and laying off workers, at a time when revenues and profits tend to fall, indicating that the possibility of losing a job or reducing working hours is the biggest impact of the recession on families.
According to Al-Khatib, although the current economic figures and data are not that bad in the eyes of some, the scientific reality requires companies to adjust their sails and prepare for recession winds, by adhering to 5 rules: slowing or stopping employment rates, dispensing with unnecessary jobs, and reducing spending. Extending the life of capital to the maximum extent possible, and always preparing for the worst.
Nobody is safe
Al-Khatib concludes by saying that economic recessions are part of the business cycle and do not last forever, but they leave victims who are employees, who are the easiest victims and the first to be sacrificed in cases of recession, and this means that no one is safe not only in technology companies but in various sectors .
deflation effects
On the other hand, information technology expert Shukri Eid said in an interview with “Sky News Arabia” that the technology sector has achieved excellent performance during the past two years, whether in terms of profits, revenues or even large employment operations, but the situation has changed now as it began to appear on the global economy, The effects of deflation, which is what scares the big tech companies.
According to Eid, it is clear that some technology companies are preparing for a slowdown in revenues and profits, so they anticipate the new situation, by reducing spending by freezing employment, or even laying off employees, until the picture of the next stage becomes clear.
Eid confirms that the factors of freezing employment or laying off employees are related to each company separately, but what can be said that the decision of Apple and Amazon may be based on indications that the Christmas and New Year season may not witness the same demand for sales, due to the high prices and low prices. The purchasing power of people, while the situation is different for Twitter, whose decision may be related to the restructuring of the company under the new management.
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