After a year of large-scale layoffs, layoffs at the tech industry's biggest companies began trickling into the first months of 2024.
Google has laid off hundreds of employees this year and has promised more cuts in the future. Amazon followed suit, cutting hundreds of jobs at its Prime Video division. Meta quietly weeded out middle managers. Microsoft also cut 1,900 jobs in its video game division.
Even as sales and profits soared and stock prices soared, layoffs continued. The disconnect reflects two major challenges facing the industry, technology officials and analysts say. That means dealing with breakneck workforce expansion during the pandemic, while at the same time actively working to build out artificial intelligence.
Now, instead of hiring thousands of people every quarter, companies are spending billions of dollars building AI technology that they believe will one day be worth trillions of dollars.
Meta CEO Mark Zuckerberg said on a conference call with analysts last week that the company is laying off employees “so we can invest in our long-term, ambitious vision around AI.” , said he needed to control costs, adding that he had come along. This is to help us “run better as a lean company.”
From late 2019 to 2023, tech companies scrambled to meet an explosion in consumer demand as people stuck at home, splurged on new computers and spent significantly more time online. Alphabet, the parent company of Apple, Amazon, Meta, Microsoft, and Google, added more than 900,000 total jobs.
When that boom ended, they were forced to adjust. Meta, Amazon, Microsoft, Google and Apple have cut about 112,000 jobs from their respective peaks in 2021 and 2022. But it was still much bigger and more profitable than it was before the pandemic began.
The five companies now employ 2.16 million people, 71% more than before the pandemic. Combined, sales for the most recent fiscal year amounted to $1.63 trillion, an increase of about 81% compared to five years ago.
Wall Street rewarded them. Over the past year, the market value of Meta, Amazon, Microsoft, Google, and Apple has increased by nearly $3.5 trillion.
Broad technology employment remains on track to recover, despite notable cuts at many other companies. Tech industry employment rose for the second straight month in January, adding 18,000 workers, according to his CompTIA, a technology education and research institute. The unemployment rate is 3.3%, lower than the national average of 3.7%.
“We're going through a cycle where we focus on innovation and then the pendulum swings back to focus on revenue,” said Tim Herbert, CompTIA's chief research officer. “But when you read about Amazon cutting jobs at Alexa or Google cutting jobs at Pixel phones, you know they care about profits. They're cutting back where they can. We are reallocating resources.”
Generative artificial intelligence has changed everyone's business priorities. The technology, which can answer questions, create images, and write code, became an overnight sensation after his ChatGPT, OpenAI's chatbot, exploded in popularity.
Big tech companies are rushing to hire engineers to build AI systems. According to CompTIA, he had 180,000 AI-related jobs in the U.S. last year, including in software development, semiconductor engineering, and cloud computing. The number of AI jobs has expanded this year.
These employees are helping Microsoft, Google, Amazon, and Meta improve chatbots and build other AI systems. Apple is hiring AI engineers to develop its own AI products to be released later this year.
“Our MO has always been to do the work and then talk about the work, and not get in front of ourselves,” Apple CEO Tim Cook said on a conference call with analysts last week. '' he said. “But there are some things we're incredibly excited about.”
Companies are spending billions of dollars on expensive chips and supercomputers needed to train and build AI systems. By the end of the year, Meta expects to purchase 350,000 specialty chips from chipmaker Nvidia, at an estimated cost of $30,000 each.
Efforts in generative AI are happening at the same time as cuts in other areas. Google's layoffs have reduced the number of people working on augmented reality technology. Meta, which laid off about 20,000 people last year, is cutting some of its program managers, who are responsible for overseeing various projects and keeping teams on track.
Amazon doubled its workforce to 1.6 million people in 2020 and 2021 in response to a surge in e-commerce orders. The jobs include increasing the number of jobs for companies from 200,000 to 380,000. The government has since cut about 30,000 corporate jobs and about 50,000 other jobs, according to people familiar with the changes, and its leadership says those jobs will not be cut anytime soon. He has made it clear that he will not be returning.
“We want to hold our headcount line,” Amazon Chief Financial Officer Brian Olsabsky said on a media conference call last week.
After laying off more than 1,000 employees in January, Google warned employees that planned layoffs could continue throughout the year. Ruth Porat, chief financial officer of Google's parent company Alphabet, said on a call with analysts last week that bringing in top engineers would be an exception.
In contrast to its peers, Apple has shown restraint in hiring during the pandemic. But last year, as sales of iPhones, iPads and Macs declined, the company began cutting back on employees. For the first time in at least 15 years, the company reported a decline in its total workforce, despite avoiding large-scale layoffs.
The 3,000 job losses Apple reported at the end of its most recent fiscal year were largely due to job cuts and encouraging some managers to take tougher annual reviews, according to three people familiar with the company's strategy. It has been reduced by.
An Apple spokesperson declined to comment.
Microsoft is the only technology company not to report a reduction in its total workforce. The company had 221,000 employees at the end of fiscal 2023, matching its post-pandemic peak.
Investors reward Microsoft's stability. Last month, it dethroned Apple as the world's most valuable company. Its market value is currently over $3 trillion.
Nico Grant, mike isaac and Karen Wise Contributed to the report.
