Dive Brief:

• Further job cuts are expected in the technology sector as a growing number of industry CFOs and other C-suite executives prioritize profitability over growth, according to a survey by AlixPartners, a consulting firm.
• The survey found that many executives are relying on headcount reduction as a tool to boost their profitability, with nearly half (46%) of those whose companies have already trimmed their workforce by more than 5% planning future job cuts over the next 12 months.
• “Unfortunately, we expect more pain to come for the tech industry,” Giuseppe Gasparro, a partner and managing director at the firm, said in a press release.

Dive Insight:

Tech companies collectively shed more than 390,000 jobs from the beginning of 2022 through the end of last month, according to Layoffs.fyi, a website that tracks such data. The players with the biggest layoffs include Google, Meta, Microsoft, Amazon and Salesforce.

Factors such as high interest rates, slowing customer demand and over-hiring during the COVID-19 pandemic have combined into a “perfect storm” that is now forcing technology-industry executives to adopt a more structured, long-term approach to ensuring profitability, according to the AlixPartners report.

“Unfortunately, we fear this storm isn’t over yet,” the report said. “The macro environment hasn’t turned and likely won’t for some time. Interest rates continue to pressure valuations and limit access to capital.”

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