There was a huge outcry when Elon Musk fired half of Twitter’s 7,500 employees and most of its contractors when he took over in October 2022. It was just the beginning.
Not long afterwards, Facebook cut 11,000 people. The move by CEO Mark Zuckerberg, whose EQ is nearly as low as Musk’s, seemed almost benign and civilised in comparison.
This year’s carnage was kicked off by Amazon, which said it would retrench 18,000 workers. “[We have] 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.”
Last week Microsoft and Google announced layoffs of 10,000 and 12,000 jobs.
Microsoft CEO Satya Nadella told the World Economic Forum in Davos last week that after the hiring surge during Covid, “quite frankly we in the tech industry will also have to get efficient” and “will have to show our own productivity gains”.
Blaming “a different economic reality” after two years of “dramatic growth”, Alphabet CEO Sundar Pichai wrote in a staff memo Google’s parent company had “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.
The tech industry has laid off 38,815 staff so far this year, according to Layoffs.fyi, which started tracking this trend in 2022 when it recorded that 154,843 people had lost their jobs.
We’ll need to make tough choices ... I take full responsibility for the decisions that led us here
— Sundar Pichai
Being a tech employee was a good occupation during the pandemic; tech firms went on a hiring spree as lockdowns and the work-from-home trend boosted e-commerce and social network use.
But with a return to the office and the end of mask mandates, people are spending less time on social media or streaming video platforms and more time in the real world.
Then inflation crept up on everyone and suddenly the cost of living was an issue — more so for the recently retrenched. Pichai said it “weighs heavily on me” that the job cuts would “impact the lives of Googlers”.
“I take full responsibility for the decisions that led us here.”
But he hinted at another underlying reason for the layoffs when he praised “our early investments in AI”.
Artificial intelligence is having a purple patch after chatbot ChatGPT launched amid feverish hype two months ago. The easy-to-use software produces impressive written responses to vocal prompts. Google, seeing a threat to its $149bn search business, declared a “code red”.
Why pay Google for display adverts if you can just ask a ChatGPT-enabled service? Bing, Microsoft’s lesser-known search engine, has already announced plans to offer ChatGPT-enhanced results.
Google founders Larry Page and Sergey Brin have been called in to help brainstorm ideas with executives and advise on its projects, The New York Times reported, signalling the search giant’s concerns.
Big tech experienced a staggering sell-off in 2022, with Facebook losing 70%, Tesla down $500bn and Amazon shedding $1-trillion. Now the sector is trying to tighten its belt. Good news for investors perhaps, for the laid-off staff not so much.
*Shapshak is editor-in-chief of Stuff.co.za and publisher of Scrolla.Africa
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