Tech’s job cuts give little hope for return to rapid growth


Worker anxiety is particularly acute in creative jobs that may be affected by the proliferation of generative artificial intelligence, which can reduce the amount of labour needed to write or produce video. — Photo by Marvin Meyer on Unsplash

The new year has kicked off for the tech industry with several companies announcing significant job cuts. It’s reminiscent of how 2023 began, which preceded the sharpest industry retraction in more than a decade.

Amazon.com Inc is cutting hundreds of workers across content-creation units, including Prime Video and livestreaming site Twitch. Unity Software Inc the maker of technology that underpins popular mobile games like Pokemon Go, said it would reduce its workforce by 25%, eliminating about 1,800 jobs.

Though smaller than the cuts a year ago from Meta Platforms Inc and Salesforce Inc, the moves show the tech industry still isn’t back to the rapid growth it saw for much of the last decade. With higher interest rates, many companies have re-oriented to focus on profit rather than rapid revenue growth.

Amazon’s job cuts are “likely just a move to further streamline costs and improve efficiency to increase earnings”, said Poonam Goyal, a Bloomberg Intelligence analyst.

AI anxiety in Big Tech

Worker anxiety is particularly acute in creative jobs that may be affected by the proliferation of generative artificial intelligence, which can reduce the amount of labour needed to write or produce video. Duolingo Inc, which makes a widely used mobile language learning app, cut 10% of its contractors such as translators in part due to a greater use of AI.

Some on Wall Street expect 2024 to bring a wave of mergers after a sleepy 2023 for deal-makers. Historically, large acquisitions have resulted in workforce redundancies. After announcing a US$14bil (RM64.98bil) merger with Juniper Networks Inc, Hewlett Packard Enterprise Co chief executive officer Antonio Neri said Wednesday in an interview with Bloomberg Television that costs could be cut at Juniper through automation.

Tech job market outlook for 2024

Despite signs of gloom, data show the job market is stabilising. The number of tech employees laid off peaked in the first quarter of 2023 and has steadily decreased since, according to Layoffs.fyi, which tracks job reductions across the industry.

The website calculated that 1,186 tech companies eliminated a total of more than 262,600 jobs last year. Eighteen tech companies have let 2,945 workers go since Jan 1, according to the website.

“I’d say the dust is settling – you’re starting to see companies gear up to say the worst is behind us,” said Bert Bean, chief executive officer of Insight Global, a staffing company.

Even if workforce cuts have stabilised, many employers remain profit-focused. Bean added that companies remain cautious about hiring and it’s less common for job candidates to receive multiple offers. – Bloomberg

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

   

Next In Tech News

Anthropic receives additional $4 billion investment from Amazon
Factbox-Who are bankrupt Northvolt's creditors?
UK should use new powers to probe Apple-Google mobile browser duopoly, report says
EU regulators scrap probe into Apple's e-book rules after complaint was withdrawn
Hyundai recalls over 145,000 electrified US vehicles on loss of drive power
'World of Warcraft' still going strong as it celebrates 20 years
Northvolt CEO steps down, saying group needs up to $1.2 billion
Bitcoin at record highs, sets sights on $100,000
Ukraine urges gamers not to enter Chernobyl exclusion zone
Kioxia's market value set at $4.9 billion in IPO

Others Also Read