Pouring billions of dollars into AI, Big Tech fires a bunch of employees
The technology world has started the new year with a series of layoffs, as the industry increases investment in artificial intelligence (AI).
Artificial intelligence (AI) is a major concern in Silicon Valley. Not all of the layoffs over the past year have been directly related to AI. Still, the recent job cuts come after tech companies announced major investments in AI as they sought to reallocate resources, and more companies have cited AI as a reason to rethink their headcount.
Continued labor upheaval in the very industry that created AI could spell more uncertainty as the technology is expected to reshape the broader business landscape in the coming years.
More than 5,500 tech workers laid off in less than two weeks in 2024
From startups to Big Tech, the cuts are coming in droves. Giants Google and Amazon have both announced major layoffs, affecting thousands of people across various divisions. The news comes months after both companies announced multibillion-dollar investments in AI startup Anthropic.
Also this week, social platform Discord said it would lay off 17% of its employees. Unity Software, which makes technology used in popular mobile games like Pokemon Go, will cut 25% of its workforce. Language learning app Duolingo said it was laying off about 10% of its contract workers.
In total, more than 5,500 tech workers lost their jobs in less than two weeks in 2024, according to data compiled by Layoffs.fyi.
The latest round of tech cuts comes after two incredibly painful years for the industry, marked by hundreds of thousands of job losses.
According to Layoffs.fyi, the tech industry will see about 262,682 layoffs in 2023, and 164,696 in 2022.
Living in fear of AI
Roger Lee, founder of the website Layoffs.fyi, told CNN that many tech companies are still trying to"overcoming overemployment during the pandemic".
The Covid-19 outbreak has led to a surge in demand for digital services as people around the world are forced to work, socialize and shop from home. In that context, the technology industry has gone on a hiring spree.
However, as restrictions eased in the following years and broader macroeconomic uncertainty emerged, the tech industry suffered its biggest decline since the dotcom bust of 2000 and was forced to cut tens of thousands of jobs in succession.
While the high interest rate environment and tech downturn have lasted longer than expected, Lee said"More and more tech companies are citing AI as a reason for layoffs."
Last year, companies including Chegg, IBM and Dropbox said the rise of AI was a reason to rethink HR. More recently, Duolingo and even Google have suggested the same as they look to mobilize resources to capitalize on the AI boom.
While the full impact of AI on the labor market is yet to be seen, researchers predict that hundreds of millions of jobs globally could be affected, despite the potential to create new and different jobs in the future.
In a March 2023 note, Goldman Sachs economists said about 300 million full-time jobs worldwide could be lost or reduced due to the rise of AI technology, and “white collar” jobs appear to be most at risk.
Separate research also found that women's jobs could be disproportionately affected by corporate adoption of AI in the coming years.
As layoffs in the tech industry continue, activists and even lawmakers are keeping a close eye on the issue. According to Parul Koul, a Google software engineer and president of the Alphabet Labor Union, laid-off Googlers were shocked when they learned the news via email.
Koul criticized the dismissal as"unnecessary and counterproductive",show"corporate greed".
"Layoffs cause chaos and instability in the workplace and force workers to do less,"Koul added. He said even those who have not lost their jobs are still"working in constant fear that I will be next."
For its part, Google defends the cuts as helping teams"become more efficient and work better".They are supporting affected employees."Find new roles at Google and beyond."
Meanwhile, some lawmakers took aim at reports of the disparate impact of tech layoffs on certain employees.
A coalition of more than two dozen lawmakers led by Democratic Reps. Emanuel Cleaver of Missouri and Barbara Lee of California have expressed concerns about"the impact of widespread layoffs in the tech industry and its disproportionate impact on African American communities and women"in a letter to acting US Labor Secretary Julie Su late last month, according to CNN.
Lawmakers are urging the U.S. Department of Labor to pay closer attention to the ongoing mass layoffs and do more to protect workers most at risk of losing their livelihoods.
