Will It Impact The Supply Chain
Since 2022, the tech industry has seen massive amounts of layoffs. Most recently, companies such as Dell gave over 6,000 employees the pink slip. With the global economy headed for a debt tsunami, what does this mean for supply chain issues?
The Deal with Tech Layoffs
January 2023 has seen the highest unemployment rate since 1969 in the United States. With nearly 70,000 layoffs being reported in tech, since the beginning of the year, there will likely be even more. There have only been four major debt waves since the 1970s–and, we are in one right now. Governments with both high and low income needed money during the pandemic, so they borrowed money and sold bonds. Some, such as Lebanon and Sri Lanka, have defaulted on those debts.
The supply chain crisis is here to stay for 2023 because a lot of things need to change in order for tech to have another big boom. For instance, we have learned that many companies need to change their manufacturing footprints. With inflation, a lot of countries will be skeptical of trade across borders. However, this means that distribution and retail supply chains will need to rapidly change and technology for the supply chain issues will accelerate investments.
What Most Media Isn’t Telling You
Some companies are warning that the layoffs are not what they seem to be. What most media isn’t telling you is that these companies are mostly trimming fringe benefits. We love that companies want you to feel your best in Silicon Valley with laundry services and massage therapists, but with a looming recession this means those perks have to go and other jobs are on the chopping block.
According to The Washington Post, “When the pandemic came, tech’s steady growth went into overdrive. Collective profits at Amazon, Apple, Facebook, Google and Microsoft grew by 55% in 2021 from an already eye-popping baseline. Their combined $1.4 trillion in sales would have made them the world’s 13th largest economy, overtaking Australia.” Now in 2023, these companies are talking about trimming middle management and cost base because they over-hired to meet pandemic needs.
Where Does Tech Go From Here?
Simply put, Silicon Valley needs to become innovative again. You can freeze fringe benefits, as well as hiring, all you want, but that doesn’t change these old, bureaucratic business models. The new wave of technology and the supply chain will be in the software developed to fix these ongoing issues. We will all be working with AI before we know it, which means less counterfeit and more profit for the technology industry.
Want to avoid counterfeit electronic parts? Check out our latest PCX news here.