Tech companies have been setting new market highs even though they have been letting a lot of people go lately. The value of Alphabet and Meta both hit a new high point, and Microsoft’s market cap went over $3 trillion. We’re seeing all of this right before these tech giants look at their quarterly reports and results.
But at the same time, we’ve seen many of these companies fire thousands of workers and keep shrinking their businesses. Over 20,000 people have been fired from 85 different tech companies so far in January. In the past few years, about 38,000 people were laid off in March, which was the most in one month.
Some of these companies are Microsoft and Brex. Microsoft just let go of 1,900 people from their gaming division, and Brex let go of 20% of its total staff. Even eBay fired 1,000 people, which is 9% of their staff.
That’s why eBay’s CEO said, “We need to better organize our teams for speed—allowing us to be more nimble, bring like-work together, and help us make decisions more quickly.”
Google, another big tech company, confirmed that they would be laying off hundreds of workers across the whole business. Amazon also let go of a lot of workers in their Prime Video, MHM Studios, Twitch, and Audible department. Unity will be letting go of 25% of its staff, and Discord will be letting go of 17%.
Last January, when tech companies cut almost 90,000 jobs, we also saw more people lose their jobs. An important reason for companies to do this is that they may have learned that they can get more done with fewer employees.
The “year of efficiency” was called by CEO Mark Zuckerberg in 2023, and many people agreed that joining jobs that are similar would help make things run more smoothly, but this would mean shedding jobs.
Some experts believe that these tech companies are laying off workers because they are getting ready for AI to make big steps forward. Perhaps they believe that hiring people won’t be as important as they thought as AI keeps getting better.
CEO of DHI group Art Zeile said, “These companies are generally cutting the number of employees tied to product lines or divisions that haven’t done well because they want to reposition themselves for AI.”
Some businesses are only letting go of workers and jobs because they need to get rid of unnecessary costs and spend less. No matter what the reason is, these businesses will likely keep letting people go as they reevaluate their staff.
