Tech layoffs are happening at an increasing rate and their stocks are following. The tech industry’s layoffs began last year and have kept up a persistent course of gloomy announcements, in some companies, taking place in multiple waves.
Why it matters: You would think that layoffs would result in plummeting stock shares, but that’s not the case in this scenario. Wall Street may be rewarding tech for layoffs, as less headcount and smaller payrolls may lead to increased profits.
- The tech industry overhired during the pandemic and started shrinking its workforce at the end of 2022 as the Federal Reserve began increasing interest rates in an effort to cool down inflation.
- Tech stocks have always been very volatile and there can be many causes for this.
- While reports in the industry vary from layoffs to breakthroughs such as ChatGPT, only time will tell whether things turn around or continue to head south.
