What are the key factors driving the significant tech sector layoffs in 2025?

The significant tech sector layoffs in 2025 are driven by three key factors. First, the COVID-19 pandemic acted as a catalyst for automation, accelerating implementation of technologies that would have taken years to adopt normally, permanently reshaping employment models in high-risk sectors. Second, evolving demand elasticity in maturing tech markets has changed hiring dynamics. As companies like Meta, Alphabet, and Salesforce reached market saturation between 2020-2023, they began experiencing diminishing returns from new hires, leading them to prioritize protecting operating margins through workforce reductions. Third, increasing financialization in business decision-making has pushed companies to prioritize shareholder returns over social impact. This has resulted in staff cuts to improve financial ratios even in companies with healthy balance sheets.