After a surge in hiring during the covid-19 pandemic, tech giants are experiencing mass layoffs. Between November and January, Amazon, Google, Meta (owner of Facebook, Instagram and WhatsApp), Microsoft and Twitter announced the closure of more than 51,000 employees.
The crisis period has causes such as: high inflation, declining sales and inflated staff. According to tech website Layoffs.fyi, nearly 194,000 area workers have lost their jobs in the United States since the start of 2022.
Check below how layoffs can affect your life and the outlook for the industry.
Fewer products on the market
According to Diogo Cortiz, professor of technology and design at the PUC-SP, the layoffs shouldn’t hit the final consumer drastically.
What can happen is the lack or delay in launching new products and services online, as these tech giants have to scale back their creations in this time of crisis. “Nothing more,” says Cortiz, who is also a researcher at NIC.BR.
Professor Ana Paula Gonçalves Serra, coordinator of computer science and information systems courses at the Mauá Institute of Technology (IMT), agrees that the impact will not be so great in this regard.
This is because the announced layoffs represent a small percentage (about 5%) of the number of hires made during the pandemic.
“Now is the time to readjust the staff. It is necessary to remember that among those who are made redundant there are professionals in human resources, people management, marketing and few are in the technology area, because these companies must continue to invest in innovation” , he adds . .
However, when the scenario is analyzed with a focus on the workforce, the situation is serious, Cortiz points out.
“As big companies start laying off workers, there is pressure from investors for other companies in the sector to follow the same process, given the difficult economic situation around the world this year. ‘organization ends up dragging others down by generating a systemic problem within the labor market,’ he adds.
That’s why we’re seeing so many well-known company names firing too many at once.
Who will fill the vacancies? Artificial intelligence?
The wave of layoffs has brought to the fore another question: Are technology and machines replacing human labor? The theme is recurring and has gained new strength with the advancement of automated systems with Artificial Intelligence (AI).
Microsoft, for example, this week announced a billion-dollar investment in a partnership with OpenAI company, creator of ChatGPT, a controversial chat robot. This came less than a week after it announced it would lay off 10,000 employees.
For Professor Serra, automated systems focus on the operational part of the work and it is difficult for them to take work away from humans in general.
“For some people, AI programs are considered employee replacements and lead to layoffs, but this is not true, as technology and platforms like these serve to improve, optimize and make people’s work more creative and less operational,” he explains .
Behind the scenes of layoffs
Alphabet Inc, parent company of Google, announced last week that it will lay off 12,000 employees, which represents 6% of its workforce.
The cuts will affect employees across the company, including in areas such as recruiting, engineering teams and products.
Additionally, layoffs will occur in several countries, starting immediately in the United States, as the process may take longer in other countries due to each location’s labor laws.
the report of Inclination contacted Google, but received no response until this report was published.
In the first week of January, Amazon also announced a mass layoff of 18,000 employees worldwide and across all industries, including its retail and HR divisions.
The number equates to 6% of the company’s entire staff, being the largest mass layoff in its history.
“This year’s review was more difficult due to the uncertain economy and the fact that we have been hiring rapidly in recent years. In November, we communicated the difficult decision to eliminate several positions in our devices and books businesses and also announced a voluntary reduction offer for certain employees of our People, Experience and Technology (PXT) organization,” said Andy Jassy, CEO of the American giant, in a note to employees.
“Multiple teams are affected; however, the majority of role eliminations occur in our Amazon stores and PXT organizations.”
After being bought by entrepreneur Elon Musk, Twitter announced the layoff of about 3,700 employees. The number represents virtually half of the 7,500 employees the company had.
Among those fired are around 150 Brazilians who worked in Brazil.
The subject of the action was the need to cut costs and impose a new work ethic, according to the Reuters news agency, which had access to Twitter’s internal plans.
Inclination tried to contact Twitter through its official channels, but got no response. In the wave of layoffs, the communications team in Brazil died out.
Meta, which owns Facebook, Instagram and WhatsApp, laid off about 11,000 employees at the end of last year. The cut represents 13% of the entire team hired by the group. This is the company’s largest headcount drop since it was founded in 2004, when it was still called Facebook.
Mark Zuckerberg, the company’s executive director, said the layoff was necessary for Meta to adjust its accounts. The group has significantly increased its investments in recent times, but the return has not been as expected.
“Not only online commerce has returned to previous trends [da pandemia de covid-19], but the macroeconomic downturn, increased competition and loss of advertising signal meant that our revenue was much lower than I expected. I made a mistake and I take responsibility for it.”
In addition to the mass layoffs, Meta has also frozen new hires for the first quarter of 2023.
Microsoft was one of the last to announce the closures. They will take place between April and June 2023. The cut will represent approximately 5% of its total employees.
The company has not yet detailed which sectors will be most affected by the cuts.
In a note, Microsoft explained that it is undergoing significant changes and that the moment experienced by the market requires prudence. And he says some sectors will continue to hire.
“We will continue to invest in areas that are strategic to our future, which means we are allocating our capital and talent in areas of secular growth and long-term competitiveness for the company, while divesting into other areas. years of history to remain an important company in this sector that is relentless with those who do not adapt to platform changes,” the tech giant explained in a statement.
“Accordingly, we assume a $1.2 billion charge for the second quarter related to termination costs, changes to our hardware portfolio, and lease consolidation costs as we build greater density in our workspaces” .
On Monday (23), Spotify, the world leader in audio platforms with more than 500 million subscribers, announced the layoff of around 600 employees, corresponding to 6% of its staff.
“Looking back, I’ve been very ambitious by investing faster than our revenue growth,” said the company’s CEO and co-founder, Daniel Ek, in a message sent to employees.
This is the largest cut in the history of the Swedish company, founded in 2006.
*With information from international agencies.
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