Tech companies are facing a reckoning as thousands of workers are being shown the door amid economic uncertainty and declining ad revenue.
Does this mean the same can be expected of other industries?
Morgan Stanley, for one, isn’t so sure.
The investment firm’s analysts say the Red Weddings at Meta, Twitter, Amazon and other tech stalwarts shouldn’t be seen as a “harbinger of changes” for all businesses.
They cited the “idiosyncratic” hiring practices of tech companies, which often reflect the boom-and-bust nature of Silicon Valley.
Even so, Morgan Stanley anticipates a “sharp” decline in employment growth as rising interest rates put the squeeze on employers and raise the likelihood of a recession.
For me, the biggest red flag is surveys showing that most CEOs believe the economy is in for a rough ride next year, and that a recession — possibly a nasty one — is all but certain.
You get the sense that many businesses are now firing first, asking questions later as they circle their fiscal wagons in anticipation of tougher times.
The bloodletting in the tech world provides cover for other industries to similarly make cutbacks.
I’m not saying widespread layoffs are inevitable.
But if a large and diverse company like Amazon, say, is having difficulties, how can things be easier for others?