40 thousand layoffs since the beginning of the year. An average of a thousand per day in the first two months of 2024. Cuts that affect technological giants and small startups. From San Francisco to Tel Aviv. But they have a minimum common denominator: reducing costs to focus on artificial intelligence. Especially the generative one. Capable of organizing part of the work, or writing and sending emails, or becoming an asset for the company in turn. And so since the beginning of the year the pace of cuts has become increasingly rapid. Cisco on Feb. 14 declared 4,250 layoffs, 5% of its workforce; PayPal 2,500; Microsoft 1,900; Sap 8,000; Bay and Google 1000; Amazon 440; Snapchat 500; Zoom 150.
The search for new structures. The focus on artificial intelligence
This is only to take into account the most well-known companies. But according to Layoff, a portal that has collected all the layoffs made by tech companies since 2021 – those about which at least something has been known – there are around 300 companies that have decided to cut their workforce from the beginning of January to today. The precise number of layoffs is 39,496 in 2024, according to the portal often used by large financial newspapers as a compass for the trend of the tech job market. Numbers currently slightly lower than the pace of the first two months of last year, when a total of 263 thousand people lost their jobs in tech with a nightmare start to the year characterized by layoffs at Meta, Amazon and Microsoft. But they photograph a trend that continues. And which hides other phenomena. Other structures that the digital economy is looking for.
There is a phenomenon taking place. Which has its roots in the Covid-19 pandemic, when all the technology companies stocked up on new employees following the promise that the confinements would lead to a triumph of digital over physical spaces (Zoom, the video streaming platform, became an icon of this revolution). A promise that was significantly reduced after the pandemic. And now, with digital bulimia waning, companies are dealing with reality.
After the year of efficiency, AI promises a new technological boom
Mark Zuckerberg in a letter to shareholders in January 2023 had spoken of what had just begun as “the year of efficiency”. By first initiating a massive layoff plan that sent 11 thousand people home, 13% of its workforce. That efficiency, that promise to shareholders that the accounts would henceforth be brought under control, has reverberations even today. Indeed, the race for AI has in some ways exasperated the search for efficiency. An analyst at Jefferis commented in recent days that “the layoffs will continue and could even get worse”. The reason? Tech companies would simply discover that they had “a pile of dead wood and that with a lighter organization they could have done a lot more.”
Companies would therefore be re-evaluating their priority areas for investment. Example. Amazon’s cuts mainly affected the video streaming platform Twitch. Positions expensive but no longer considered essential. Microsoft, Meta, Google and Spotify are called to find new balances this year. Spotify administrator Daniel Ek said it clearly at the beginning of the year: “We need to become more efficient, it’s true, but we need to invest in new sectors.” Number one suspect, the AI.
The Salesforce case and new hires in AI
One of the largest layoff plans last year was that of Salesforce, the San Francisco cloud giant. In January a year ago it announced 800 layoffs among its 80,000 employees. In September, at its annual event in San Francisco, the company unveiled its plan to put AI front and center. To become an AI company. There are no official figures, but from what La Stampa reports, the company today would once again have close to 80,000 employees. And the new hires deal with Ai in some way. Same thing for Meta, which is hiring in that sector. And the same thing for Google, which has hundreds of open positions in AI.
The year of efficiency is not over yet. Many analysts are convinced that there will be more layoffs and more hires, in an exhausting turnover that calls into question abilities and skills and asks employees to rethink, reinvent themselves, acquire new knowledge. Still.
