Is the current economic crisis the real reason for tech industries recent reduction in workforces? Yes, the economy is in bad shape. Interest’s rates are high and inflation is climbing, but it is also evident that the recent leaps and bounds made within the developments of Artificial Intelligence (AI), is making it easier for BIG TECH to part with their employees.
Google Cuts 12.5% of Workforce in 2023
First, to put Google cuts in context: in Q3 2021 Alphabet Inc. reported 150,028 total employee’s. On January 20, 2023 Sundar Pichai CEO of Google and Alphabet released a statement “A difficult decision to set us up for the future”. His statement goes on to convey that “We’ve (Google) decided to reduce our workforce by approximately 12,000 roles” (12.5% of their company). Later in the statement he says that the company is pivoting and recalls Google “to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry.”
Microsoft Cuts 4.5% of Workforce in 2023
Google is not the only tech company who has recently minimized their work force, just 2 days prior to Google’s announcement, CEO of Microsoft Satya Narayana Nadella announced “we are making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q”. Microsoft reported 222,000 Number of employees in 2022. He went as far to mention "some parts of the world are in a recession and other parts are anticipating one".
Template-like Similar Statements by Google and Microsoft
If you review the Google and Microsoft statements, they are very similar in nature, almost template like. The one item which is echoed in both statements, Both Google and Microsoft mention advances in artificial intelligence (AI).
Google’s CEO Sundar Pichai states he is confident in “the strength of our mission, the value of our products and services, and our early investments in AI.”. Microsoft’s CEO said “the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform.”
AI, artificial intelligence is the simulation of human intelligence in machines that are programmed to think and learn like humans. AI is a broad field that encompasses various sub-disciplines, such as machine learning, natural language processing, computer vision, and robotics.
"above section written by AI"
The mention of robotics reminds me of another recent major layoff announcement. On January 4, 2023 CEO of Amazon Andy Jassy offered an update on role eliminations. “Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles. Several teams are impacted; however, the majority of role eliminations are in our Amazon Stores and PXT organizations.”
While both Google and Microsoft mention AI in their statements, Amazon made no mention to AI in their statement. However, they laid it on thick relative to how bad they felt, and “don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted.”.
The Tech Company Severance Template:
Google is providing generous severance packages, “starting at 16 weeks salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting”.
Microsoft employees “will receive a variety of benefits, including above-market severance pay, continuing healthcare coverage for six months”.
Amazon will be “providing packages that include a separation payment, transitional health insurance benefits, and external job placement support.”
While these severance packages sound reasonable, they are a small concession for those who now must find a new job in already suffering employment landscape.
Artificial Intelligence versus Human Labor
The truth is that AI is everywhere. As I stated earlier in this article: AI has is now being used in many broad fields. In fact, artificial intelligence is now commonly used. For an example, AI is now used to author all types of text content. Everything including but not limited to love letters, website blog articles, news articles, and school exam papers. Imagine all the cause and effects of a world were AI is producing our content?
Google has several research divisions dedicated to AI, such as Google Brain, which focuses on developing deep learning algorithms and building AI systems that can learn from large datasets. Google Research is another division that conducts research in various areas of AI, including computer vision, natural language processing, and reinforcement learning. Google also has several open-source AI projects such as TensorFlow, a machine learning library, and Open Images, a dataset of images with annotations.
Microsoft also has a significant presence in the field of artificial intelligence (AI). Microsoft uses AI in its various products and services such as Bing, Cortana, Skype, and LinkedIn. The company's AI research is focused on developing advanced machine learning algorithms, natural language processing, computer vision, and other AI-related technologies. Microsoft has several divisions dedicated to AI research, such as Microsoft Research, which conducts research in various areas of AI, including computer vision, natural language processing, and reinforcement learning. Microsoft also has several AI-powered products, such as Azure Machine Learning, a cloud-based machine learning platform, and Cognitive Services, a collection of pre-built APIs for natural language processing, computer vision, and other AI tasks. Microsoft also has several open-source AI projects such as the Microsoft AI platform and the Microsoft Cognitive Toolkit.
Saving Money and Looking Forward
The recent position terminations at these BIG TECH Companies are clearly cost-cutting measures that will help them through the current economic downturn amplified by the COVID-19 pandemic. Ironically, many of these same tech companies benefited initially from the pandemic. Looking forward, it appears AI will pick up the slack. As we move into the future, it is important to remember that it was the "human touch" that brought these companies to the great heights which they currently enjoy.
In closing, these moves may be painful for the employees affected, but appear to be an unavoidable step in evolution. A step that takes place in a futurist time, where artificial intelligence is now playing a key part in full filling the human void.
On a final note, the Google SEO Sundar Pichai closes his statement with the following:
"I’m sure you have many questions about how we’ll move forward. We’ll be organizing a town hall on Monday. Check your calendar for details. Until then, please take good care of yourselves as you absorb this difficult news. As part of that, if you are just starting your work day, please feel free to work from home today."
You can read CEO of Google and Alphabet Sundar Pichai’s full statement here:
You can read Microsoft CEO Sundar Pichai’s full statement here:
You can read Amazon CEO Andy Jassy’s full statement here: