After the so-called right wing relished the sacking of Twitter workers across the world including in India, Amazon is going to lay off as many as 10,000 employees in “corporate and technology” across the world, and it is not the problem of those precariously placed workers alone, no matter whatever you believe their ideology is. Sackings and hiring freezes are now a phenomenon across the tech sector, most prominently by Meta, which laid off over 11,000 employees last week.

Why are Big Tech companies like Amazon firing their workers?

Because post-Covid-19 pandemic, demand has shrunk. While the worldwide and nationwide lockdowns had forced people indoors in 2020-21, making them buy more online and spend more time on social media sites, consume more streaming content, play games with others, etc, the fast-normalising world does not crave a digital life. Companies like Amazon had hired large workforces to cater to the increased demand, which is now on the wane.

Workers are returning to offices and rediscovering the pleasure of moving around and engaging with people in real life, digital platforms are less sought after, resulting in a decline in these firms’ revenue. No wonder, fewer people are needed to manage these platforms.

Those who said online work would be “the new normal” had misread the situation, which has now been aggravated by a global recession made worse by the Russia-Ukraine war, US/Nato embargo on Russia, chequered natural gas supply through Europe, Opec members acting pricey, etc, hitting demand for non-essential products in the market. Buyers are purchasing nothing other than essentials, hit by inflation and a poor value of most currencies except the US dollar.

Why is the fact that Amazon is laying off employees not a problem for the workers on the firing line alone?

Amazon, being one of the most stable employers in the tech sector, is sending jitters to the entire workforce, with speculative reports that the layoff will be the largest in the company’s history. The unannounced plan is telling the world that consumer confidence is low. “Consumer confidence” is marked by purchases by individuals beyond their means — for example, a middle-class man buying an expensive house or car and paying for it in instalments — which they do when they believe they will earn more in the future than the money they are making at present.

The weeks of this festive season were good as usual in India, but the level of shopping did not touch the best in e-commerce that pre-pandemic years had seen during Diwali.

In this dull shopping season, the demand even for Alexa devices is declining across the world, affecting Amazon’s revenue.

Which other companies have announced layoffs?

Top among the firers is Meta, the parent company of Facebook, which is affected by falling engagements on its platforms along with ad tracking policies that have impacted the effectiveness of campaigns on its platforms. Meta laid off over 11,000 workers last week.

However, the ‘newsier’ firing has been at Twitter, thanks to its being the favourite platform for politicians, journalists, film personalities, social media influences and other celebrities. Elon Musk, after taking over the micro-blogging platform, says the sackings are needed to rationalise the platform’s business model.

Apple has not announced layoffs yet, but it is hiring at a slower rate, seeing a drop in demand across products and services.