Two Forrester analysts provide their perspectives on the latest news of Meta laying off 11,000 employees and continued layoffs across the tech industry
Following job cuts across the tech industry, including the latest news of Meta laying off 11,000 employees, Forrester VP/Principal Analyst J.P. Gownder and VP/Research Director Mike Proulx proffered some insights.
But first, some fresh background data: Forrester’s October 2022 Consumer Energy Index And Retail Pulse Survey found that a quarter (25%) of Gen Z adults (ages 18–25) plan to spend less time on Facebook in 2023, while 7% say they will quit Facebook entirely.
Apparently, the metaverse has lots of disruptive potential – including in the job market.
“Meta is amidst an identity crisis. The company has one foot in a risky long-term metaverse bet and another foot failing to compete with TikTok,” commented Proulx.
“Neither bodes well for Meta in the short-term and more severe cost-cutting measures were inevitable as the company attempts to regroup heading into a bleak 2023. Expect more headwinds for Meta as Gen Z continues to exit Facebook and favor TikTok over Reels, and CMOs consolidate their slashed media budgets towards safe and sure bets.”
Meanwhile, Gownder commented on the wider industry layoffs: “Some tech companies have already laid off workers, like Twitter, Intel, Salesforce, Microsoft, Zendesk, among others. It’s a good bet that tech companies that haven’t yet laid off employees are carefully considering whether or not to do so.”
Gownder said it would not be surprising to see more layoffs in the next few months, particularly among firms whose fiscal year ends on 31 December 2022. “They want to set up finances for success in 2023. Widespread economic concerns – some prompted by rising interest rates, others by the war in Ukraine, high fuel costs, and supply chain issues – are prompting these moves in anticipation of lower demand.”
The overall tech job market remains strong, with a global talent crunch. “People with high skills are still in demand and difficult to hire,” said Gownder. “Many of the laid-off tech workers have skills that will be valuable in other sectors. Nearly every company, regardless of industry – finance, healthcare, retail — is now a ‘technology firm’ that relies on software developers, engineers, and IT talent. So top tech talent who lose their jobs will find other positions, most likely.”
However, layoffs in tech companies from jobs that are in less demand – like administration and recruitment – might have a harder time finding new positions. “We should always remember the human costs of layoffs,” added Gownder. “These employees have their lives disrupted and their personal finances put at risk. So there’s always a tragic element to any discussion of layoffs, and we should remember that real people are affected.”