Traders work on the floor of the New York Stock Exchange

Traders work on the floor of the New York Stock Exchange on January 4, 2023 in New York City.

(Photo: Michael M. Santiago/Getty Images)

'Wall Street Loves Layoffs': Rich Investors Demand More Carnage as Tech Slashes Jobs

One pro-worker coalition called Amazon's recent job cuts "sacrificial symbols for Wall Street."

Amazon, Microsoft, Google, and other major tech companies have moved in recent days to lay off tens of thousands of employees, slashing jobs across the board amid mounting fears of a Fed-induced recession.

But the sweeping job cuts—more than 18,000 at Amazon, 10,000 at Microsoft, and 12,000 at Google—were apparently not enough to satisfy ultra-rich investors, some of whom have taken large stakes in tech companies with the intention of forcing layoffs and other cost-cutting as a way of boosting profits.

"The decision to cut 12,000 jobs is a step in the right direction, but it does not even reverse the very strong headcount growth of 2022," billionaire hedge fund manager Christopher Hohn wrote in a January 20 letter to Google CEO Sundar Pichai.

"I believe that management should aim to reduce headcount to around 150,000," Hohn added, urging the tech behemoth to slash tens of thousands of additional jobs.

Elliott Management, a large U.S. investment firm, recently opened a multibillion-dollar position in the software giant Salesforce, which announced earlier this month that it will be cutting roughly 10% of its workforce—around 8,000 jobs.

Bloomberg reported Monday that Salesforce "will probably be urged by activist investors" such as Elliott "to cut more jobs, make changes to the board, and spin off big acquisitions in search of greater profit."

"Investors greeted the news Sunday that Elliott had taken a multibillion-dollar stake by sending shares up 3.1% Monday to close at $155.87—the highest price since the company announced co-Chief Executive Officer Bret Taylor's departure on November 30," Bloomberg added.

The shares of other tech companies staged similar rallies in the wake of layoff announcements. The music streaming company Spotify announced Monday that it is cutting 6% of its global workforce—and the firm's stock surged as a result.

Facebook parent company Meta and Google parent company Alphabet also saw their stocks rise following their layoff announcements, which were met with outrage by employees and labor organizations.

"In one email, Alphabet executives took away the livelihoods of 12,000 of our coworkers," the Alphabet Workers Union tweeted Monday. "They are now being forced to find jobs along with the 200,000 other tech workers laid off in the last 14 months."

Some Google employees didn't realize they were laid off until they arrived at the office and found that their access badges were deactivated.

The Athena Coalition, an alliance of local and national groups representing U.S. workers, called Amazon's job cuts and the company's decision to shut down its AmazonSmile charity donation program "sacrificial symbols for Wall Street, exposing again the world's second-wealthiest company's indifference to workers and all people."

On top of the tech layoffs, the online furniture retailer Wayfair said last week that it plans to slash 1,750 jobs, news that sent the company's share price more than 20% higher. Days later, JPMorgan analysts upgraded the stock, sparking another rally.

"Wall Street loves layoffs," Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, tweeted Monday.

Whether the spate of Big Tech layoffs signals more pain to come for the broader U.S. economy or is largely the product of industry-specific challenges remains to be seen, but the job cuts have heightened anxiety about the labor market as a whole as the Federal Reserve continues to raise interest rates, explicitly targeting workers and their wages.

Though the U.S. unemployment rate remains at historically low levels, hiring has slowed in recent months and wage growth has cooled substantially, intensifying calls for the Fed to stop raising rates.

"Awful to see these mass layoffs happening—and to realize it's a deliberate political choice by the Fed to provoke a recession, for political and cultural reasons," progressive strategist Robert Cruickshank wrote last week. "These layoffs didn't have to happen, and people should be furious at the federal government for not stopping it."

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