Unknown: Hi, Bernie. Hi. Thanks
for meeting with me. And Rosie. We have an important meeting
today. We finished our evaluations of 2023 performance.
This is where you have not met Cloudflare expectations for
performance. We've decided to part ways with you. Yeah, I'm gonna stop right there. This is a viral video posted by
Brittany Pietsch, a former employee of CloudFlare, a San
Francisco based tech company. The video posted on January
2024, and got so much attention that it may have kicked off a
new sub genre of viral video watch this person get laid off
in real time. The tech industry is again seeing widespread
layoffs after a rough 2023 LinkedIn just laid off nearly 700 employees.
Qualcomm is planning to cut more than 1200 jobs Google Amazon and Snap are among the
companies continuing to downsize in the start of 2024 seems no
different as layoff announcements, especially in the
tech industry continue to make headlines. Units affected they also include
hardware engineering, ad sales so far last night CEO Sundar
Pichai told his workforce to expect more cuts Kate Rooney: and Amazon
spokesperson did confirm those layoffs ahead of prime and prime
video and MGM saying in that memo that the company is making
some of the cuts to prioritize investments for the long term.
layoffs Unknown: are also plaguing
industries like healthcare, banking and media, whoever the
tech industry is the one that's been dominating the headlines.
This Devyn Rafols-Nunez: layoff and
everything that's happened in tech, I think is pretty eye
opening. You know, like, you can have your dream job, you can
have your Oh, it's my dream to work for Microsoft or it's my
dream to work for AWS. And you get there and you realize, huh,
okay, it's just like any other job. It's a great place to be.
There's a lot of great perks, but at the end of the day, you
can get rid of you like that Unknown: the layoffs to the
start of 2024 signal a dramatic shift in the tech industry,
we're going to continue to see layoffs happen as the future of
work has changed as the future of technology has changed. And
as investors the appetite for risk and growth versus
profitability has dramatically changed as well. So why are big tech companies
and other industries laying off 10s of 1000s of workers at a
time when the US economy looks strong on paper? The start of the Covid 19
pandemic was a dire economic event, at least at first. The
tech industry though, boomed in 2020, Tech's top seven companies
added $3.4 trillion dollars in value. The feds emergency moves
to bolster the pandemic hit economy, like cutting interest
rates to near zero helped boost tech stocks. This move helped
the tech industry to expand and went on a hiring spree as people
were confined to home. Amazon added the most number of
employees during this golden period peaking at 1.6 million
employees in 2021. If you rewind before the layoffs,
all the tech companies were really putting an emphasis on
growth. And so capital was really cheap, you know, so you
could get loans, you could get money access to capital was
really affordable. And then you see as interest rates went up,
and you start to see that that growth in headcount didn't
translate to growth and profitability. And access to
capital became quite a bit tighter, you saw many companies
start to hit the panic button. And so we see saw these 1000s
and 1000s of people get laid off all at once. And that was quite
a shocked 80% of Twitter either left or quit
or was pushed out laid off whatever you want to call it.
And yet the website still runs. Do you think people are looking
at Elon Musk and thinking, You know what, we really need all
these people. I do get Elon Musk credit for
this for kicking off and making this acceptable Twitter, but a
lot of the big companies decided to get lean and efficient. And
you know, this is where you kind of start to see the incredible
leverage of what these tech platforms really have, which is
they didn't need those people, right? They were hoarding the
talent. It was an option that and it was a cheap one for them.
Yeah, I asked every tech CEO, do you
take inspiration for what Elon does? And they'll say on the
record? No, we don't we would never want to do that. But, you
know, in the group chats, they're all like, wow, that was
an amazing move. The artificial intelligence hype
of 2023 is starting to have real world effects in 2024 major tech
CEOs are doubling down their investments in AI. In January
2024, meta CEO Mark Zuckerberg announced his plans to build an
artificial general intelligence known as AGI everyone. Today I'm bringing Meta's AI
research efforts closer together to support our long term goals.
Building general intelligence, open sourcing it responsibly,
and making it available and useful to everyone in all of our daily lives. All
this investment in creating AI jobs, but at the end spends of
others, the recent report from indeed shows that the number of
job posts containing Gen AI terms has been surging. So there's about a 500% increase
in the number of jobs that mentioned generative AI, there's
about a 6,000% increase in the demand from job seekers for
these jobs. But there still is, I think, a mismatch the other
way, and that the total amount of demand for AI talent far
outstrips the number of AI professionals, every company in every industry is trying to
figure out how to use AI in everything they do. I mean, AI
is going to create a lot more jobs as well. But at the same
time, I would say that there will be jobs that will be
automated. So you the AI has already hit the
business effectively. Oh, absolutely. Absolutely. Especially in the
tech sector. I mean, they've been talking about it for years.
Now, the fact that you have more companies moving towards
artificial intelligence, and they're looking at the fact that
as opposed to paying somebody 200 $300,000 a year to do the
job, I can actually use artificial intelligence to do
the job that they used to be able to do this AI thing is real is not going
away, and they can't have people holding them back. And so what
they've been doing over the past year is finding places within
the organization that they can trim so that they can get to a
place where they're shipping faster, take managers out, and
then engineers who are skilled for a previous generation of
technology, they're also leaving to make room for people who are
more skilled for artificial intelligence, AI is definitely playing a role
in the layoffs that we're seeing. Automation has increased
efficiency for some of the workers who are able to utilize
AI to make marketing decisions to analyze data to serve
customers more efficiently and effectively. So AI is a paradigm
shift that is changing the way people work and changing the
priorities of tech companies. Right now, I don't see that
there's a big impact from AI in these tech layoffs. Some
businesses have maybe cited that they're trying to, you know,
shift priorities, and they're letting some employees go to
focus more energy on some of these generative AI tools. But I
think it's important to say that, that's very different than
saying that companies are, well, we can let people go now because
you know, general AI, and all these tools are taking jobs. The tech industry used to have
this shiny image of having big salaries, and unlimited perks.
But the recent tech layoff stories have completely
shattered that image. Devyn Rafols-Nunez: I really
don't have any regrets about posting it or what's happened. I
think the bigger picture is that I've been able to be a voice for
people who have gone through something similar. You know, the
stories that I've received are people who were laid off 2030
years ago, and they still remember to this day, how that
made them feel, and it did not make them feel good. And I think
that we should shed light on stuff like that. So we can make
a change, otherwise nothing will change. In Unknown: my experience, the
public sharing of things like one's layoff I think, is
partially due to the fact of the rise of social media such as
tick tock, even YouTube shorts, people are becoming much more
comfortable with sharing their experiences. And oftentimes when
layoffs happen, people feel shame when they are being laid
off. In reality, though, oftentimes if people are being
laid off, it's a failure of leadership of that company. Tech companies that conducted
widespread layoffs have seen a bounce in their stocks. The tech
heavy NASDAQ climbed to 43% in 2023. Its best year since 2020.
Meta was the biggest gainer among big tech surging over
194%. The tech stock boom also helps boost the wealth of tech
billionaires, the super rich CEOs saw their wealth grow by
48%, or $658 billion in 2023. Let's hard particularly for a company
like Google, which over the past 25 years hasn't gone through a
moment like this. But you know, we've always deeply cared about
our employees. We also note the sign of negative
developments that are in some sense a sign of positive
developments of a greater demand for the services and automation
and activity improvements. Now we see the stock market reacted
quite favorably to this round of layoffs. We see these record
stock prices for a lot of these tech companies. And so the stock
price the investors really favored profitability, really
favored this lean year that these tech companies had. And so
instead of rewarding the growth that we saw in them all pursue
years ago, they're now rewarding profit. And so the layoffs have
continued. People have become used to them, and regrettably,
and sadly, it seems that the layoffs is going to be the new
normal. data suggests an influx of
layoffs in the tech industry, starting from the second half of
two At 22 and peaking and 2023 some non tech sectors are also
seeing widespread layoffs. A prime example is ups the courier
giant raised eyebrows by announcing 12,000 job cuts in
January. The media industry isn't immune to layoffs either.
And 2023 to industry shed over 20,000 jobs in 2024. It looks no
different as big names like Paramount NBC Sports Illustrated
The Los Angeles Times all have announced major job cuts in
early 2024. The banking sector is also not shying away from
cutting jobs, Citigroup, Morgan Stanley Deutsche Bank, or some
of the big names that have already announced their layoff
plans for 2024. It's worth noting that even though these
mass layoffs continue dominating headlines, labor markets still
seem strong. The US economy added 353,000 jobs in January,
much better than the Dow Jones estimate for 185,000 jobs. But
the unemployment rate held at 3.7%. Against the forecasts for
3.8%. Experts are divided on whether the recent tech layoffs
would trickle down to non tech sectors. Looking at the current job
market right now, there's no evidence that we're going to see
any trickling obviously, you know, kind of the jury's still
out. It's still early to tell. But it's interesting as we look
back, and 2023 2023 was a year of a lot of layoffs in the tech
industry. And we didn't see any of that trickle out. Even within
the tech industry, which is usually the government usually
defines it as the information sector. We didn't see a very
high layoff rate. So we saw a lot of companies announcing
layoffs. But those companies kind of carried an outsized
share of the media, because then once we rolled it all up, there
was maybe about 1% of employment that was being laid off. So
really, ultimately, the overall rate of people losing jobs to
layoffs, remains near historic lows. It hasn't yet trickled down to the
rest of the economy as we're seeing the stock prices really
high unemployment fairly low. But at some point, if this
continues, both companies and individuals are going to have to
cut back spending and that has consequences that reaches far
beyond the tech industry.
