Mr Branding: Research indicates that many tech giants are laying-off workers as their revenues begin to drop

Sunday, April 2, 2023

Research indicates that many tech giants are laying-off workers as their revenues begin to drop

The majority CEOs of the largest tech companies believed that increasing the numbers of employees and expanding their workspace would boost up their revenues; nevertheless, they were unaware that they would have to pay for it. The CEOs of the companies claimed that hiring fewer staff increases the likelihood of overall increased efficiency and productivity since poorer productivity results from having a larger workforce, which inevitably lowers annual revenues.

Several businesses, however, became aware of this too late, but as soon as they did; they promptly began to take steps to reduce their workforce by 300,000 from the start of 2022.

Many CEOs of large organizations, including Mark Zuckerberg, the owner of one of the biggest tech companies, "Meta," admitted that they afterwards regretted their earlier belief that the pandemic's golden period would persist indefinitely. As many people started to spend more and more time on social media apps and various games, the share prices increased and therefore, companies expanded their workspace.

After the pandemic came to an end, many business owners didn’t see that their employing additional personnel would lead to such fewer sales.

To determine how much revenues have declined over 2018 – 2022, BusinessInsider conducted a research in which it was discovered that "larger is not necessarily better" by examining certain large corporations like Amazon, Meta, and Twitter and their revenues per employee. This study was conducted to determine the reasons behind the recent decision by numerous businesses to terminate their employees. However, to assess the data, many charts were used.

In the first graph, the number of workers and the number of revenues per employee since 2018 are displayed. The chart makes it clear why Amazon, Twitter, and Meta opted to lay off their employees the most, as Amazon had to experience a 6.9% decline in sales as a result of over-hiring to 1.5 million workers as of last year. In addition, there was a 14.9% and a 59.1% fall in Meta and Twitter, respectively. Nevertheless, while these three tech giants were experiencing a decline, other businesses witnessed an increase in their sales.

Moreover, the second chart in this study showed how much revenues these firms made per employee over the course of these five years. While firms like Apple generate the most revenues per employee with 2.4 million in sales, businesses like Twitter only saw 317,333k of revenues in 2022. According to the report, Apple, Microsoft, and Salesforce were the only Big Tech companies to experience an increase in sales.

So overall, it was not bad, especially when you consider that Apple has been fortunate with this trend; while other businesses panicked and saw a sharp decline in their profits, this tech giant nonetheless managed to keep growing its own. The third and final graphic shows that whereas Apple had 2.4 million revenues, the average for other firms was just 949.27k.