When wars erupt or economies slow down, one of the first headlines we often see is: “Tech companies announce mass layoffs.”
But why is the IT sector hit so hard, and is there a pattern behind it?
This blog explains why layoffs happen during wars and recessions, especially in the IT industry, using real-world data, examples, and trends.
1. Economic Recession = Budget Cuts
During a recession, businesses earn less, spend less, and plan less. Tech projects—often seen as long-term investments—are the first to be delayed or cancelled.
Real Example:
- In the 2008 financial crisis, over 800,000 U.S. private-sector jobs were lost in Jan 2009 alone.
- Many tech firms—especially software and IT services—froze hiring and laid off staff as businesses halted IT upgrades.
Stat Source:
U.S. Bureau of Labor Statistics – Employment Situation, 2009
2. Wars Disrupt Global Supply Chains
Modern wars don’t just stay on battlefields. They ripple into oil prices, trade routes, and chip manufacturing—heavily affecting the tech world.
Impact Areas:
- Energy cost spikes → Higher operational costs.
- Disrupted supply chains → Delays in hardware, affecting IT rollouts.
- Investor uncertainty → Companies hold off on new tech hiring.
Real Example:
- After the Russia-Ukraine war began, energy prices in Europe rose by 50%, pushing companies to reduce budgets and delay projects.
- Global chip shortages also delayed hardware production.
Sources:
- Reuters – Energy Prices Surge Due to War
3. Over hiring During the Pandemic
In 2020–2021, tech demand exploded due to remote work, online shopping, and digital transformation.
Companies overestimated long-term demand—and over hired.
What Happened Next?
- As life returned to normal, demand dropped.
- These companies were left with bloated teams and falling profits.
- Layoffs were inevitable.
Stat:
Over 150,000 tech jobs were cut in 2022 alone.
(Source: Layoffs.fyi)
4. AI & Automation Are Replacing Jobs
Automation is changing the game. Many companies are shifting from large teams to smaller teams supported by AI tools.
Real Example:
- IBM laid off around 8,000 workers recently to refocus on AI.
- Google, Amazon, and Meta have also trimmed staff to reinvest in AI and automation tools.
Reference:
- Reuters on IBM Layoffs
- Business Insider on Tech Layoffs
5. The 2025 Tech Layoff Wave
Companies Cutting Jobs This Year (Jan–May 2025):
| Company | Approx. Jobs Cut | Reason |
| Intel | 10,000+ | Shutdown of foundry/auto businesses |
| Meta | 3,600+ | Efficiency, AI restructuring |
| IBM | 8,000+ | AI-driven automation |
| Salesforce, HP, Google | Thousands more | Cost-cutting & slowing sales |
Total in 2025 (so far): Over 62,000 IT layoffs.
(Source: Layoffs.fyi)
Summary Table: Why IT Gets Hit the Hardest
| Factor | Impact on IT Sector |
| Recession | Clients cut spending on tech |
| Wars | Increase energy/logistics costs; reduce demand |
| Overhiring post-COVID | Bloat in workforce → downsizing needed |
| AI & automation | Jobs replaced by machines/tools |
| Global uncertainty | Tech investments get paused |
Final Thoughts
Layoffs during wars and recessions are not random—they follow economic patterns, company strategies, and evolving tech trends.
For individuals, being aware and prepared can turn tough times into opportunities.
