--- title: Why are there so many tech layoffs? - The Hustle description: Cheap money is out, and companies hired lots of people during the pandemic. image: https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/2012563462-HS-News-Brief_2023-01-24T002724.255Z.webp --- # Why are there so many tech layoffs? ![Mark Dent](https://thehustle.co/wp-content/uploads/2020/04/0-3-1.jpeg?width=48&height=48&name=0-3-1.jpeg) [Mark Dent](https://hs-sbup.thehustle.co/author/mark-dent) Published: April 11, 2023 Updated: October 11, 2023 On Monday, Spotify became the latest tech giant to shrink its staff, [announcing](https://www.cnbc.com/2023/01/23/spotify-to-cut-6percent-of-its-workforce-as-tech-layoffs-continue.html) it would cut ~600 workers, or 6% of its workforce. ![Why are there so many tech layoffs?](https://hs-sbup.thehustle.co/hs-fs/hubfs/The%20Hustle%20News/Assets/Images/2012563462-HS-News-Brief_2023-01-24T002724.255Z.webp?width=595&height=400&name=2012563462-HS-News-Brief_2023-01-24T002724.255Z.webp) That brings the total number of tech layoffs in 2023 to ~57k, following ~159k in 2022, according to[ Layoffs.fyi](https://layoffs.fyi/). The Great Reduction is happening in a labor market that, for the most part, is [humming along ](https://www.npr.org/2022/12/02/1140117598/jobs-employment-unemployment-rate-november-workers)just fine. Why is it 2023 for most industries and [2000 all over again](https://sfist.com/2022/11/10/throwback-thursday-the-last-big-tech-layoff-bloodbath-the-dot-com-bust-of-2000-2001/) for tech? **For one thing…** … tech companies [hired a ton ](https://www.wsj.com/articles/tech-layoffs-unwind-recent-head-count-growth-torpedo-long-shot-projects-11674350455?mod=hp_lead_pos6)of employees from 2020 to early 2022, when it seemed Americans might never leave their homes again (except to tour open houses and unsuccessfully bid on other homes). - Alphabet said it would slash 12k jobs on Friday after adding 30k+ jobs in 2022, per the *Wall Street Journal*. - Microsoft said it would cut ~10k jobs last week after adding 40k in the last fiscal year. Basically, tech companies are backing away from staff counts they believed were necessary for a tech-centric future that hasn’t come to fruition. **Then there are the Fed’s interest rate hikes** As you likely know (especially if you kept trying to buy a house), borrowing has gotten more expensive. Without cheap money, investors are less willing to subsidize long runways and pie-in-the-sky projects, according to [*The* *New York Times*](https://www.nytimes.com/2023/01/23/technology/tech-interest-rates-layoffs.html). Tech companies are shifting their focus accordingly to making money instead of chasing long-term growth. And terribly enough, investors *have liked *these recent layoffs: - Spotify’s stock [jumped 5%](https://www.forbes.com/sites/jonathanponciano/2023/01/23/spotify-alphabet-and-meta-lead-tech-stock-surge-after-massive-layoff-announcements/?sh=10090665585b) after its layoff announcement Monday before cooling off in the afternoon. Alphabet and Wayfair experienced similar spikes after layoff announcements. **Is it all vibes then?** *The Atlantic*’s Derek Thompson [doesn’t rule it out,](https://www.theatlantic.com/newsletters/archive/2023/01/what-the-tech-and-media-layoffs-are-really-telling-us-about-the-economy/672791/) writing that one explanation for the layoffs could be tech CEOs mimicking each other to get a brief high from the market. 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