Data from S&P Global Market Intelligence, Amazon.com Inc (NASDAQ: AMZN), Google parent company Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), Microsoft Corporation (NASDAQ: MSFT), Meta Platforms (NASDAQ: META) Apple Inc (NASDAQ: AAPL) has the highest cash and short-term investment balances of any non-bank company in the S&P 500 community. Although they are not strapped for cash, they are very cautious about their spending.
Amazon and Google's parent company Alphabet began the new year by announcing further job cuts. Last year, Amazon, Google, Microsoft, Meta, and Salesforce Inc. (NYSE:CRM) each cut their headcounts by 6% to 13%, but the layoffs will begin in 2022, leaving thousands of employees out of work. lost.
New layoffs signal further cuts at big tech companies
Last week, Google announced it was cutting jobs across its engineering and hardware teams in an effort to improve efficiency. Other departments at the tech giant were affected, but primarily employees in hardware, central engineering, and the Google Assistant voice-activated software product. Google cut about 12,000 jobs last year under Sundar Pichai's leadership as it continues to compete with rivals Microsoft and Amazon.
E-commerce and cloud giant Amazon is laying off hundreds of people across its Twitch, Prime Video, and MGM Studios divisions, bringing its overall headcount to 27,000. Amazon laid off about 18,000 employees last year alone.
Cut jobs to fund AI efforts
It seems like an odd time for layoffs, given that Big Tech companies ended 2023 emerging from a post-pandemic recession thanks to a recovery in online advertising, but Big Tech companies are looking to build AI services. is engaged in an expensive arms race. It's no surprise, then, that Google and Amazon have chosen to continue their cost-cutting efforts while streamlining their operations and focusing on key projects. However, even if AI spending increases this year, the impact on revenue is likely to be limited. Generative AI is expected to deliver significant benefits, but it will take time to translate the magic of GenAI into desired revenue and bottom-line business effects. Microsoft took an early lead in the AI race thanks to its partnership with OpenAI, creator of ChatGPT, but Amazon and Google are determined to catch up and are spending billions of dollars to do so. Must be used wisely.
Disclaimer: This content is for informational purposes only. It is not intended as investment advice.
This article was contributed by an unpaid external contributor. This does not represent Benzinga's reporting and has not been edited for content or accuracy.
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The article Big Tech announces another round of layoffs as it continues expensive efforts to turn GenAI into business magic originally appeared on Benzinga.com.
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