There was a huge outcry when Elon Musk summarily fired half of Twitter’s 7,500 employees and most of its contractors when he took over last October. That was a lot of people suddenly out of jobs. But that was just the beginning.
Not long afterwards, Facebook cut 11,000 people. Its CEO Mark Zuckerberg, who has almost as little EQ as Musk, seemed almost benign and civilised compared to the head-on-fire Tesla CEO.
Amazon kicked off the year, saying it would retrench 18,000 workers. Having “weathered uncertain and difficult economies in the past,” CEO Andy Jassy wrote to staff, “these changes will help us pursue our long-term opportunities with a stronger cost structure”.
Microsoft and Google followed suit and announced huge layoffs of 10,000 and 12,000 jobs.
Microsoft’s CEO Satya Nadella told the World Economic Forum in Davos that after the hiring surge during Covid, “quite frankly we in the tech industry will also have to get efficient.” The tech industry “will have to show our own productivity gains,” he added.
Blaming “a different economic reality” after two years of “dramatic growth,” Alphabet CEO Sundar Pichai wrote in a staff memo it has “undertaken a rigorous review” of roles and products. “We’ll need to make tough choices,” he wrote, of the decision to fire 6% of its workforce.
As tech bleeds workers, will the bots takeover?
The tech industry laid off 98,100 staff so far this year, according to Layoffs.fyi, which started tracking this trend last year, when it recorded 159,786 people lost their jobs.
Being a tech employee was a good occupation over the last two years, as tech firms hired massively with lockdown and the work-from-home trend causing a massive uptick in screen time and social network usage.
But with a return to the office and the end of mask mandates, people are spending less time on socials or video streaming platforms and more time in the real world.
Then inflation crept up on everyone and suddenly the cost of living was under threat –more so for the recently retrenched. At least Pichai acknowledged “these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here”.
But he hinted at another underlying reason when he praised “our early investments in AI”.
Artificial intelligence (AI) is having a sudden purple patch after chatbot ChatGPT launched to huge hype. This generative AI chatbot produces impressive written responses to prompts, leading to Google declaring a “code red” as such efficiency might threaten its $149 billion search business.
Why pay Google for display adverts if you can just ask a ChatGPT-enabled service? Microsoft has already announced plans to offer similar AI-driven search results in its lesser-known search engine Bing after integrating OpenAI’s image-generating tool DALL-E.
Google founders Larry Page and Sergey Brin were called in last December to help brainstorm ideas with executives and advise on its projects, the New York Times reported, signalling the search giant’s concerns.
Big Tech saw massive value wiped off its shareholding last year, with Facebook losing 70%, Tesla down $500 billion and Amazon shedding $1 trillion. Now, they are trying to cut their headcount to tighten their belts. Good news for investors perhaps, for the laid-off staff not so much.
This article first appeared in the Financial Mail.