When Steve Jobs stood on stage at MacWorld in 2007 and unveiled the iPhone, it triggered one of the biggest single tech collapses in recent memory. The dawn of the smartphone era marked the end for comparatively low-tech handsets – a market dominated by Nokia.
The fallout saw roughly 20,000 people lose their jobs at the Finnish tech giant, which was once worth twice as much as its country's entire GDP. But Nokia's demise, as one of the country's technocrats told me a few years ago, may have been "one of the best things to ever happen to Finland". Ex workers went on to found numerous startups that fuelled one of the most thriving scenes in all of Europe. It is now home to one of the continent's largest tech conferences in Slush, as well as well as several post-collapse unicorns like Supercell, Rovio and Oura – all of which built their success by embracing the emergence of smartphones.
We are currently witnessing one of the biggest rounds of industry layoffs in recent memory, with January setting a post-pandemic record for the number of workers let go from tech firms. Google fired 12,000 workers, Microsoft 10,000, Amazon 8,000, Salesforce 8,000 and IBM 4,000. Apple is maybe the only household name from Big Tech to so far avoid mass layoffs
All together, close to 70,000 people lost their jobs over the last month, according to figures from Layoffs.fyi (see chart below), as companies shed employees at a rate of roughly 2,200 a day. It's enough to fill a stadium the size of Old Trafford with highly-skilled, highly-educated workers.
The cuts are being blamed on a slowing economy and overly ambitious growth targets set during lockdowns, when more people were spending time online. Another, less talked about reason is automation – especially in sectors like HR where AI tools are fulfilling many mundane tasks.
Tech workers are still in demand, particularly from more traditional companies that are looking to modernise. (SouthWest Airlines, for example, just announced a billion dollars of spending on new technology.) But a looming global recession and a hiring freeze at some of the biggest firms has led to dire forecasts for the tech sector from some commentators.
It may also not be the last of the layoffs, with job losses rising every month since September – barring a Christmas Armistice in December – though just like the broader economy these things tend to be cyclical.
Compared to Nokia's decline, more than 10-times the number of workers have lost their jobs since the pandemic-induced bubble burst. Generous severance packages – plus a reminder that the 'family' and 'Ohana' ethos espoused by many of the prominent tech giants is meaningless when profits are at stake – may see many choose to take the opportunity to explore passion projects, build businesses and develop new technologies of their own. If so, this tech bust could well be the beginning of a new tech boom.
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