2023 Predictions Part I

Tech Layoffs

Scott Galloway predicts significant layoffs in the tech industry due to disproportionate growth in headcount compared to revenue. He highlights companies like Meta, Pinterest, and Roblox, where headcount increases have outpaced revenue growth, suggesting inevitable job cuts. Galloway explains, "When a company's revenue is up 9% and its cost of that revenue is up 26% and its headcount is up 40%, most tech companies, the majority of their sg and a comes from people. That just spells the layoffs are coming."

He also foresees that despite a slowdown in revenue, major tech companies like Amazon and Alphabet will achieve high profitability by reducing costs, primarily through layoffs 1.

   

Market Shifts

The job market is experiencing a shift as companies reallocate human capital to optimize efficiency. Scott Galloway notes that the tech sector, which has seen unprecedented growth, is now poised to "give back some of these extraordinary, unparalleled, unprecedented, historic gains." Galloway mentions, "We're starting to see tech layoffs, a lot of noise here. Less, more noise than news. I think it becomes news in 2023."

He suggests that the leverage is shifting back to management, with CEOs taking cues from Elon Musk's cost-cutting measures at Twitter, potentially leading to further layoffs even in profitable companies 2.