Could the Rise of AI Technology Be the Real Reason Behind the Recent Tech Industry Layoffs?
And is your job at risk?
Layoffs are not a new phenomenon, they have always been and will be part of our economic system. Layoffs always tend to follow a major economic event, like a movie showing after trailers. The last major layoffs came after the ‘08 crash and the early stages of the pandemic.
However, the new set of layoffs has been unusual in more ways than one.
Most companies spearheading this layoff wave are tech companies.
These same companies have recently gone through a period of unprecedented profits and expansion.
October twenty-seven, 2022
Elon bought Twitter, took over and discovered the company wasn’t profitable. He immediately set a strong tone by dismissing 3700 employees. It was a drastic but necessary move by the new CEO. He immediately followed up with several other measures (some baffling, some genius) to get his new company on the right track. I don’t agree with some of his ideas, but one has to admit Elon had a clear and sensible motive.
Fast forward two weeks later, Facebook announced it was laying off thousands. It didn’t take long before Amazon, Google, Microsoft and Netflix jumped on the bandwagon. The victim list was similar. Tech positions, high and low, experienced or newbie, it didn’t matter. These were the same job positions that have been the most valuable for the last few years. Positions that attracted not only insane salaries but also stock options and other perks in the packages.
These companies all claimed their reason was cost-cutting and money-saving, as a recession loomed. Experts theorized it was an opportunity to get their shareholders happy. Stock prices usually jump by a few percentage points after layoff announcements. But if that was the case, why stagger the layoffs in batches? Why not take one big swing? Something was clearly not adding up.
November thirty, 2022–Enter ChatGPT
The announcement barely made any serious headlines, but it marked the beginning of a new world. I stumbled across a video of an over-excited TikToker one evening. Despite the clickbait title, the first video seemed unimpressive. I was in complete awe by the time the 20th video appeared on my FYP (For You Page). I quickly fired up my MacBook, followed the login instructions from TikTok and typed in the blandest prompt to see if it was real.
“Write a YouTube script for reducing living expenses.”
I watched ChatGPT do its magic. I marvelled at what I saw. It was exciting and terrifying at the same time. Like everyone else, I selfishly imagined the amount of creative work I could start. I could finally complete all the unfinished projects I never got around to.
Enter Microsoft … and Google
It didn’t take long after the initial buzz for Microsoft to come knocking on OpenAI’s door. This was finally going to be the spark that turned their fortunes around and maybe steal the spotlight from Google. Microsoft got ChatGPT fast and integrated it into its ecosystem even faster. Not wanting to be outdone, Google announced Bard, albeit a failed announcement. More and more AI platforms were springing up faster than crypto coins in 2020.
While all this was happening, ChatGPT itself was still evolving. Showing capabilities we could only have imagined. It had gone from “an app for generating content” to a master builder of websites and full applications. It even passed the BAR!
Connecting the dots
A few days ago, while scrolling through Twitter, I came across the answer to my initial question. Or should I say, a follow-up question to my initial question above? Was AI the fire behind the smoke of layoffs? Did these companies know about the impending release of groundbreaking AI technology before we did? Is that what sparked their decision to cut off their most valuable human capital?
When you think about it for a minute, it’s not so far-fetched. It’s no longer news that big tech has access to an insane amount of data and information.
Seeing the IBM headline sent shivers down my spine. It was a clear sign of things to come. Prior to this news, other companies claimed their interest in AI was to support their employees. By integrating AI, their employees could work better and faster. While that may hold some truth, you can’t help but wonder why the layoffs have not stopped. Why have developers and tech bros remained the main item on the chopping block?
One has to wonder if this trend will continue as more companies enter the race for AI. Would the layoffs spread to other positions as AI shows competence in other fields?
What do you think? Have you been affected by these layoffs? Let me know your thoughts in the comments.
Sources
Hetler, A. (2023) Tech sector layoffs explained: What you need to know, WhatIs.com. Available at: https://www.techtarget.com/whatis/feature/Tech-sector-layoffs-explained-What-you-need-to-know (Accessed: 09 May 2023).
Kelly, S.M. (2023) Microsoft confirms it’s investing billions in the creator of chatgpt | CNN business, CNN. Available at: https://edition.cnn.com/2023/01/23/tech/microsoft-invests-chatgpt-openai/index.html (Accessed: 09 May 2023).
Marr, B. (2023) The real reasons for Big Tech layoffs at Google, Microsoft, Meta, and Amazon, Forbes. Available at: https://www.forbes.com/sites/bernardmarr/2023/01/30/the-real-reasons-for-big-tech-layoffs-at-google-microsoft-meta-and-amazon/ (Accessed: 09 May 2023).
Stringer, A. and Wiggers, K. (2023) CHATGPT: Everything you need to know about the AI-powered chatbot, TechCrunch. Available at: https://techcrunch.com/2023/05/03/chatgpt-everything-you-need-to-know-about-the-ai-powered-chatbot/?guccounter=1 (Accessed: 09 May 2023).
Trueman, C. (2023) Tech layoffs in 2023: A timeline, Computerworld. Available at: https://www.computerworld.com/article/3685936/tech-layoffs-in-2023-a-timeline.html (Accessed: 09 May 2023).
Ulatowski, R. (2023) Tech layoffs aren’t slowing down for many companies-here’s why, The Mary Sue. Available at: https://www.themarysue.com/why-are-there-so-many-tech-layoffs/ (Accessed: 09 May 2023).
