The Real Reasons For Big Tech Layoffs At Google, Microsoft, Meta, And Amazon – Forbes

Between them, some of the world’s biggest tech companies have collectively laid off more than 150, 000 workers in recent months. The businesses involved have put forward a variety of reasons for why this was necessary, which mostly come down to a need to reduce costs as economic growth slows down around the world.

In truth, it isn’t likely to be because the businesses involved need money. Ms MSFT , which is reported to have laid away around 10, 000 employees, practically simultaneously announced that it plans to invest $10 billion in OpenAI, the creators of the viral application ChatGPT. It seems likely that there is a business reason at the heart from the decision to invest a sum that would equate to $1 million per laid-off employee within an AI company.

Likewise, Google’s GOOG parent company Alphabet GOOGL announced plans to reduce its global headcount by 12, 000 – the cut of around 6%. CEO Sundar Pichai has previously described AI as the most transformational technology of all time, and in making the particular layoffs, stated that the strategy will be in order to “direct our talent and capital to our highest priorities. ” It’s widely thought that will Google is working on its own AI-powered answer in order to ChatGPT that will be announced soon.

Together, four of the greatest tech companies – Meta, Alphabet, Amazon AMZN , plus Microsoft – have cut 50, 500 jobs. Meanwhile, Twitter’s incoming new boss, Elon Musk, is said to have fired half associated with the company’s employees when he took over at the end of last year.

So , what is the particular true reason for these mass cuts that have left tens of thousands (80% of them in the US) out of work? This was what data experts in 365 Data Science attempted to get to the bottom of whenever they decided to run their own analysis from the figures.

Some of the findings were perhaps not that surprising. It’s known that tech companies — buoyed simply by record revenues — undertook a hiring spree during the Covid-19 pandemic. Salaries hit record levels as competition raged for the top talent, and the media has been full of stories of lavish perks. So, it’s not a shock to find that the particular median time a recently laid-off employee has been in their role will be roughly two years. This could suggest that will, in some ways, these types of cuts represent a winding-back of hiring policies put in place since the outbreak.

More amazing though, had been the fact that the median level associated with experience held by those who had been let go is 11. 5 years. So , it’s not necessarily true that these are all junior workers with little experience who could be quickly replaced or possibly even have their own roles automated. One possible reason for this statistic could be that longer-serving workers tend in order to receive higher salaries, and cutting them could help businesses meet their particular financial targets.

However , it is interesting to note that the roles and job functions the majority of affected were within HR, which accounted for 28 percent of all layoffs. There are two feasible reasons for this – firstly, this follows that will if companies are laying away from staff, they will also become cutting back on recruitment, and less recruitment means less require for HUMAN RESOURCES staff.

A second, though perhaps just because relevant cause, however , is that HR is usually an area where some functions are being replaced by automation. Platforms already exist that aim to automate routine tasks related to interviewing plus onboarding new hires, such as checking references, verifying identities, and carrying out health and safety assessments. In recent years, it’s even been reported that will companies like Amazon have used AI to identify low-performing staff and then fire all of them .

We also get a few insight into how the functions that had been affected differed between each company. While HR plus talent sourcing were many affected from Microsoft and Meta, with Google plus Twitter, it was software engineers who took the brunt of the cuts.

The data collected simply by 365 Information Science also shows that a narrow majority of the particular staff who were let go (56 percent) were female. This is definitely worrying, given that the tech industry has spent much of the last decade attempting to address the gender imbalance already present within the field – particularly within technical and engineering roles. It doesn’t exactly send out a great message to potential new woman hires that will, as well as a pay gap and a lower likelihood associated with progressing into senior tasks, they are going to possess to content with a greater chance of being release.

Finally, one more worrying statistic that jumped away at me from the report was the fact that only 10 percent of those laid off have got thus far listed the new work on their LinkedIn profiles. Of course , it is too early to tell whether this can be likely to transition into long-term unemployment – many may simply end up being enjoying a break before jumping in to job-hunting. Or, indeed might simply not really have bothered to update their information yet. But monitoring exactly how this statistic develops over coming months should give some fascinating insights directly into whether or not this is still easy with regard to skilled technology workers in order to move between jobs. It’s perfectly achievable that the substantial number may choose to head into self-employment or the particular freelance gig economy.

Therefore, is it the case that this tech giants simply expanded too much, too quickly? Or is it that will innovations in AI plus automation have created a situation where the fastest way to save money is to replace people with machines? In truth, it’s probably a little of both. None of the companies possess specified automation as a driving force behind the moves, but provided the job roles affected and reading among the lines, it’s tempting to draw the conclusion that it is a contributing factor.

To stay on top of the particular latest on new plus emerging business and tech trends, make sure to subscribe to my newsletter , follow me upon Twitter , LinkedIn , and YouTube , and check out there my books ‘ Future Skills: The 20 Skills Plus Competencies Everyone Needs To Succeed In A Digital World ’ plus ‘ Business Trends in Practice , which usually won the 2022 Business Book associated with the Year award.