Silicon Valley tech companies lay off workers fearing economic uncertainty

SAN JOSE, Calif. - A Silicon Valley "bloodbath": that's how some tech experts are describing widespread layoffs.

Companies like Stripe and Lyft are cutting workers, and so are Coinbase and Robinhood.

"They're preparing for the worst. That's the underlying theme of everything going on," says Professor Ahmed Banafa of San Jose State University.

While some companies are choosing layoffs, others are hoping to trim fat through attrition.
And big players like Amazon and Apple have announced hiring freezes.

"A lot of companies are looking at the possibility of a recession that we're going to see in 2023 and they don't want to be caught off guard by doing it after the fact," says Banafa.

But fear of recession is only part of the problem, experts say.
Excessive hiring during the pandemic is another.

"Right now there's just too much uncertainty on the economy for them to keep those numbers in place and keep their shareholders happy," says Tim Bajarin, tech analyst with Creative Strategies.

The result is a glut of tech workers now flooding the job market.
But Banafa says unemployment is still low in Silicon Valley and plenty of companies, like Tik Tok, are hiring.

"So it's closed from one side but open from the other side," he says.

Experts say this is not a burst tech bubble like Silicon Valley saw in 2000, and not a real estate bubble like 2008, but rather a belt tightening.

"Yes we're going to have some pain. Yes we're going to see layoffs. But we are eventually going to come out of it," says Bajarin. He adds, "To write Silicon Valley off I think would be a big mistake."