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More tech layoffs: Are these additional signs of possible recession? Bay Area expert explains

"We haven't seen these kind of trends simultaneously maybe ever. Certainly not in the last 20 to 25 years."

ByLuz Pena KGO logo

Tuesday, November 15, 2022

With more tech layoffs, are these signs of possible recession?

With more tech layoffs expected this week, this time at Amazon, could this mean a possible recession in the U.S.?

SAN FRANCISCO (KGO) -- More tech layoffs are expected this week. This time at Amazon. The New York Times is reporting approximately 10,000 amazon employees will be let go.

"We haven't seen these kind of trends simultaneously maybe ever. Certainly not in the last 20 to 25 years," said Jo-Ellen Pozner, Associated professor of management at Santa Clara University's Leavey School of Business.

"So I think a lot of organizations are trying to make sense of what's actually driving the problems facing them right now. It's not easy to pin the explanation for a particular problem on any one thing. We've been through a pandemic. There is global inflation, there is a war in Ukraine and energy disruptions," she said.

MORE: Amazon plans to lay off thousands of workers: report

In the last couple of weeks, Twitter laid off approximately half of its workforce. Meta more than 11,000 employees and now Amazon are these additional signs of a possible recession?

"Recessions happen because lots of people look to read the tea-leafs and make decision based on what they expect to happen. So, that is not to say that there can't be a connection a causal connection between what tech companies are doing and what the rest of the economy might be doing in 6 months. But is there a determinate unavoidable relationship? There is not," said Pozner.

MORE: Layoff tracker: Mass layoffs by tech companies big and small hit the Bay Area

Why are these companies laying off employees back to back? Professor Pozner believes these companies could be watching what each other are doing and following the trend.

"It's kind of easier to perhaps say well Google is laying off people, Amazon is laying off people, Meta is layoff people so it's okay for us to do it too and it looks like it's part of a larger trend," said Pozner

VIDEO: Here's how Twitter employees are finding out they've been laid off as nearly 50% of workforce cut

A week after Elon Musk's takeover of the company, Twitter began layoffs on Friday that will cut roughly half of its 7,500-person workforce.

These layoffs are also creating what psychologists call survivors guilt.

"For those who kept their jobs there are a lot of challenges, anxiety," said Michael Vicente Stanton, PhD, Cal State East Bay Professor and Clinical Psychologist and added, "There are studies that show that people can have some symptoms similar to PTSD. Post-traumatic stress disorder."

VIDEO: Bay Area tech giants announce massive layoffs on same day in what experts are calling 'unusual'

Twitter, Lyft, Stripe announce mass layoffs. Experts explain what's behind massive cutback amid tech slowdown in the San Francisco Bay Are and beyond.

Professor Vicente Staton has studied the stress of layoffs and says that mental stress could translate to physical conditions.

MORE: Tech expert explains what Meta's large-scale layoffs could mean for the Bay Area

"There are chemicals in the body that we release that are stress hormones. They are really helpful in helping us fight stress in the short term but they are actually really poisonous to the body in the long term," said Stanton.

Professor Vicente Staton recommends to have honest conversations with your family of a potential layoff and map out a strategy to pivot into a new industry or a new role in case of a layoff.

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