The huge wave of tech layoffs is laying the groundwork for a 20% rally among stocks in the sector, Wedbush says
Business InsiderAPR 2023
These companies have no choice but to downsize. The pandemic tech boom allowed companies to increase their workforces by as much as 200%, but the economy has since turned for the worse. With the US Federal Reserve reacting to inflation by hiking interest rates, there’s less available venture capital, and digital-ad revenue has dipped.
Instead of layoffs, which are an old-school way of dealing with a recession, companies should find alternative strategies because social media has made everyone a workers' rights activist with a global microphone. Companies that conduct layoffs suffer from poor optics, the cost of restructuring, and the low morale they create — leading them to perform poorly.