Massive Layoffs by Tech Giants – Cause and Possible Impact on Saudi Arabia’s Tech Economy
Last Updated on November 13, 2023 by Ameer Hamza
Indeed, tech is the new oil, but the new oil may just prove to have expensive and far-reaching consequences in the lives of tech professionals. While several tech giants saw exponential growth in the last two years, many have recently been disappointed with the repeated massive employee layoff worldwide.
This article sheds light on the causes and possible impact of layoffs by tech giants, particularly within Saudi Arabia’s economy.
What are the Causes of the Recent Massive Layoffs by Tech Giants
One cannot dispute the fact that the pace of growth for tech giants has slowed significantly this year, with many of them retracing their steps and putting an end to the employment contract they have with several of their employees.
An in-depth perusal of this unprecedented decision will reveal that many of these tech giants suffer from the over-hiring syndrome. This syndrome is generally a condition where there is surplus hiring during the highs of the business. Thus, many of these companies are left bleeding profits with more workers than the company needs.
Of course, one can always link the layoffs to the surge in demand for tech-related activities after the effect of Covid-19 has waned. The relaxation of the lockdown measure was accompanied by a massive surge in tech, which in turn created the illusion of exponential demand. Unfortunately, many countries are battling with the financial aftereffects left by the virus and are on the brink of recession. So, tech giants have taken to lay off for fear of being left handicapped.
With Saudi Arabia although the country has been on the road to increased economic stability, the volatility of the oil market caused by little global liquidity and conflicts between countries may just start to shake the previously grounded economy of Saudi Arabia, leading to increased layoffs.
What are the Possible Impacts of the Tech Layoffs on Saudi Arabia’s Economy
The natural consequences of the series of layoffs by tech giants are predicted as very likely to be evident in countries’ economies, and Saudi Arabia is no exception. The country can expect a massive spike in unemployment rates. Professionals who may not be able to fit into labour-oriented jobs in Saudi Arabia may be left stranded without a quick alternative.
Conversely, some experts have argued that the effect of the layoffs on Saudi Arabia’s economy may not be as extreme as it looks. They opine that tech giants have always laid off employees, and this has failed to have a corresponding effect on the general labour market. Provided that there are no increased layoffs in other sectors of the country, then it can rest easy that it is only the faction may not have a substantial impact on the economy.
Regardless of whatever the purported effect of these layoffs is on the economy of Saudi Arabia, one thing remains sure: the country’s resilient nature and zeal will get it through the tough times. Saudi Arabia has a history of forging through significant problems and coming out safe on the other side. Undoubtedly, that will be the case for this new development in the tech industry.