Reflections and concerns brought about by the bursting of the technology bubble

2022 is destined to be a troubling year for the technology industry. The general trend of explosive growth in the technology industry over the past decade has not only stopped quickly but also begun to decline. People’s fanatical pursuit of technology companies seems to have stopped instantly, and the enthusiasm has dissipated, causing most technology companies’ economic revenue to fall off a cliff. Compared with continuing to pursue high-speed growth as a goal, technology companies are more willing to focus on survival. “Live first, live better second” has become a new slogan in the technology industry and is also the most authentic portrayal of the status quo.

What put an end to the rapid growth of the technology industry in the past? The global economic slowdown is a crucial factor. Since the outbreak of COVID-19, it has had many negative impacts on global trade, the national economy, international relations, and other vital issues. Humankind is facing significant changes unseen in a century. Factors such as the Russo-Ukrainian War, energy shortages, and numerous unilateral sanctions constantly reshape the international landscape. All countries experienced a sharp slowdown in GDP growth, with the technology sector being the most affected.

In order to survive, layoffs have become a necessary means used by technology companies. Shortly after Elon Musk took over Twitter, in the first week of November, Musk fired half of its staff. So far, Twitter’s workforce has shrunk from 7,500 to 2,700, meaning nearly two-thirds of its workforce has been laid off. Twitter will pay the fired employees three months’ salary as compensation.

It’s not just Twitter; Meta CEO Mark Zuckerberg told employees on Wednesday that Meta will lay off 13 percent of its workforce, or more than 11,000 employees. Meta is the parent company of Facebook and is also defined by Zuckerberg as a metaverse company. However, Meta’s stock price has fallen 70 percent since its peak in market cap, and it’s down another 20 percent since it delivered its annual fourth-quarter revenue report in October. CEO Zuckerberg says he will ‘takes full responsibility’ for Meta layoffs. Meta will pay the sacked employees 16 weeks’ salary as compensation payments.

Large-scale layoffs have to arouse our attention and reflection. The turbulent employment market will lead to social panic and have a direct impact on people’s employment confidence and prospects. The company and the government should provide the most basic protection for the rights and interests of employees, and this large-scale layoff in the technology industry seems too simple and rude.

Most technology companies summarize the reason for layoffs as a direct consequence of “lukewarm benefits,” and the critical criterion for measuring benefits is cost, and scale is an essential factor affecting price. Therefore, we need to think about a question: Since the technology industry began to expand wildly, whether it has already laid the groundwork for this large-scale layoff. In many ways, the expansion of the technology industry is not regulated by government agencies.

The technology industry has already played a leading role in the market economy. If the government does not intervene in supervision and allows it to fend for itself, any consequences will be disastrous. There is no doubt that we need a strong government agency or department to monitor the development curve of large technology companies. We must prevent technology companies from playing the role of a pseudo-government and imposing their will on the market.

According to data from the Pew Research Center, 55% of Americans hope that the government can limit the growth of significant technology companies, including the public, partisans, and practitioners. They said that even if big tech companies play by the rules, the government should not allow them to grow beyond a specific size because it would hurt competition. “The higher you fly, the more painful you fall.” These people hope to limit the height at which these technology companies can “fly” to protect the economy and employees.

From another perspective, restricting and controlling the development of technology companies is not only protecting the company but also protecting employees. Technology companies are staffed by top talent, the most intelligent people on the planet. If their jobs and lives cannot be guaranteed, then the future of this moment is also insecure. They are like the engine for the progress of this society, and their protection is also the protection of the future of the world. Large technology companies have strong economic strength. While investing funds in development, they should also invest in ensuring the work and life of employees.

References
Cover Images
https://thenextweb.com/news/the-2015-tech-bubble-explained
https://techcrunch.com/2022/11/03/twitter-layoffs-elon-musk/
Meta Announcement
https://www.youtube.com/watch?v=0CZGiMxymI4
Pew Research Center
https://www.pewresearch.org/fact-tank/2021/07/20/56-of-americans-support-more-regulation-of-major-technology-companies/