2023 was a near-abysmal year for many tech employees. Tens of thousands of employees working with Big Tech, including Google, Meta, and Microsoft, received their pink slips almost throughout the year. The companies claimed the move was part of their cost-cutting and re-organization efforts.
2024 does not seem to be different in any way either. Will it turn out to be even worse?
Many of the major tech businesses have already declared layoffs affecting hundreds of employees in the New Year. This step seems to be an indication of the upcoming massive layoffs.
Here we take a look at the recent announcements by Google and other major tech companies and the underlying factors driving these layoffs.
Google Layoffs
Google has let more than 1,000 workers off their duties in its engineering, hardware, digital assistant, and other departments. Restructuring efforts, streamlining operations, and redirecting funds to other key objectives are the main reasons attributed to this move.
One can only imagine the anxiety Google employees must have felt on receiving their CEO, Sundar Pichai’s email claiming that the company is likely to push through additional layoffs during the year. Legal challenges and growing competition have been assigned as the key underlying reasons in this email.
While a severance package is part of the deal, the tech giant also offered the option to shift positions within the organization.
Amazon’s Layoffs
Amazon has been the world’s largest online retailer, recording over $133 billion in revenue in 2022. It is cutting off its workforce from Amazon Prime Video and MGM Studios divisions. Again, the reason attributed is the same. The company is simplifying its business and focusing on its key objectives.
Amazon claims to have conducted an in-depth analysis of its operations and taken steps to improve organizational efficiency and customer satisfaction. It did not reveal how many employees were affected but only indicated that it was a very small number.
Similar to Google, the fired employees were given the option to explore other positions within the company and were offered severance pay.
These layoffs have been announced at a time when Amazon is asking its work-from-home (WFH) employees to return to office. The company requires its staff to work at least three days from the office.
Meta Layoffs
Even the social media giant, Meta, is cutting down on manpower. Most of these job cuts affect the technical program manager (TPM) role across Instagram, Facebook, and WhatsApp. The tech company has claimed that this decision was taken to streamline its operations and focus on its current goal – the metaverse.
According to Meta, the affected employees can opt to go through a new interview process to be repositioned to other areas within the organization.
More insider insights were gained from former Meta employees. It is claimed that Meta is implementing a restructuring program which it has named, “the flattening.” The company began this program last year with the goal to bring down multiple, unnecessary management tiers and to boost organizational efficiency.
More layoffs are expected as Mark Zuckerberg and Susan Li have claimed that the company is currently focused on reducing nonproductive segments and projects. Meta is planning to return to its pre-pandemic staff levels.
Discord
Discord is an online streaming service and the company has named its layoff spree as a strategy for simplifying its operations. 17% of its workforce received the pink slip as part of its strategy to focus on its primary goal. The announcement was made by the company’s CEO, Jason Citron during a meeting. The news reached company workers through a note.
The CEO claimed that the move was a difficult one for the firm, but an important one to make it more efficient. According to the top executive, the company’s rapid growth fueled massive hiring. This had affected the company’s productivity.
Employees across different departments were affected by the move. This move comes after a previous series of layoffs in August of 2023 when 4% of Discord’s workforce was shown the door.
Underlying Causes of the Layoffs
While tech CEOs are great at dishing out the standard, over-the-counter reasons to explain such layoffs, there are a number of underlying factors that are fueling these Big Tech and Small Tech layoffs.
While tech jobs are known for their general sense of job security, 2023 proved to be one of the gloomiest years for tech employees as it recorded some of the highest numbers of layoffs in more than a decade. After the Great Recession, the 2020 pandemic was the only time people lost so many jobs.
Last year, almost three-quarters of a million people lost their tech jobs. The trend has continued to follow through into 2024.
AI is replacing many human functions in the field. When combined with the following underlying causes, it is sure to give new IT job aspirants more reasons to pursue a career in another field:
i. Profit-Driven Cost Cutting
Many companies are vying for ways to generate profits. Cost-cutting is the key reason for Google to cut hundreds of jobs. CEO Pichai also mentioned in his memo that the company is planning to divert its focus to emerging technologies such as AI.
Another spokesperson for the tech giant used words such as “responsibly investing” in certain “priorities.” Alphabet Workers Union was vocal about the company’s decision through a press release, claiming it was a “senseless” and “misguided decision making.”
Amazon too has made job cuts to bring down costs in low-profit, high-cost areas.
ii. Deflating Hiring Boom from the Covid-19 Pandemic
These tech giants entered into a ‘wild hiring spree’ in 2021 and 2022. They have vast employee pools and they are in a position to continue reducing the numbers. In 2023, these companies realized they had over-hired during the post-peak pandemic period.
The current series of job cuts means that these firms came to the realization they hadn’t cut enough ranks in 2023. Tech is one industry that saw the fastest turnaround from hiring to layoffs.
Post-pandemic boom, many corporations are facing slower growth rates. This happened while the interest rates continued to stay high. This factor has further led to the push the focus on profits.
iii. The Rise of Artificial Intelligence
John Connor wouldn’t be happy with the way AI is evolving and the direction it is taking. It is already replacing people in the tech sector. Most notable among the developments is the growing popularity of ChatGPT, the AI chatbot.
Tech giants are going aggressive in hiring AI-adjacent roles. The general perception is that AI is poised to be the next tech boom space. Many companies are downsizing their non-AI operations with a focus on profitability and expense management.
Companies have announced that AI impacted 4,000 job cuts in 2023. The impact is expected to be massive in the future as AI evolves at a staggering pace.
