More than 220,000 employees in the new technologies sector in the United States have been laid off since 2022. A sector that doubts and seems to be wavering at a time when inflation and rising interest rates are weighing heavily on the economic balance. Strategically, it is also the arrival for the general public of artificial intelligence ChatGPT which sows doubt among the traditional tech giants.
12,000 redundancies at Alphabet (Google), 11,000 at Meta (FacebookInstagram), 10,000 for Microsoft18,000 for Amazon8,000 at Salesforce, 4,000 at Cisco, 3,700 at Twitter… The bill is salty in the tech sector in California (and in the world too, the Swedish Spotify separates from 6% of its payroll, 600 people). For Google, it will be more than 6% of the workforce: “ Over the past two years, we have experienced periods of spectacular growth “Said Sundar Pichai, boss of Alphabet. ” Tech stalwarts have been hiring at a pace that was unsustainable and the deteriorating macro environment is now forcing them to lay off “commented an expert.
The tech sector reflects a cruel reflection
Particularly violent dismissals for employees who, for some, came in the morning to the entrance of the New York building of the firm to test their badge to find out if they were still employed in the company. On a Linkedin page, the licensees recount the conditions of their departure and the shock experienced in their professional career. Some women learned about it when they were pregnant or a young mother, others arrived barely a year ago from abroad to work at Google and find themselves in a critical situation…
Employees over 20 learned about it by email or in front of Alphabet’s closed door, others simply at home via their connected objects, which worked differently that day. This tech sector, which encourages everyone to expose their lives via the mirror of social networks, has been sending a cruel reflection in recent days.
It’s hard for me to believe that after 20 years at #Google I unexpectedly find out about my last day via an email. What a slap in the face. I wish I could have said goodbye to everyone face to face.
#layoffs— Jeremy Joslin (@jcj) January 20, 2023
In France, as in Germany, the legislation is different and the repercussions of the dismissals will be later. The stress still remains. In the United States, the laid-off employees will receive at least sixteen weeks of salary, their bonuses for 2022, their paid holidays as well as six months of health coverage. Foreign employees settled in the United States will also be able to benefit from assistance in their legal procedures if they wish to remain on American soil. Wall Street welcomed the announcement of these job cuts.
Strategic waste for the GAFAs
In compassion for the loss of a job, it is surprising to observe negative comments, even a certain denigration on social networks, concerning the attitude of these giants. And when we ask some Silicon Valley personalities their feeling is a resentment that is expressed by comparing recent years to strategic waste for the GAFA. The thunderous arrival of ChatGPT which cost “ barely a billion hurts the search engine, which seems not to have anticipated much. The Chinese TikTok argues in front of the moribund YouTube, same observation at Meta (Facebook and Instagram) out of breath.
Therefore the hashtag #googlelayoffs is often doubled by others more aggressive on working conditions (delusional among the big tech companies) and on long-term strategy. Which makes the founder of OpenAI Sam Altman say: I’m not supposed to be smart right now… but OPenAI is worth several billion dollars (some say 20 billion) with 375 employees. A situation never seen in this sector, and if we had any doubts about the ChatGPT buzz, they are swept away by the law of the market.
i know im not supposed to brag about openai, but the talent density at this scale (375 people) is ? and i dont think has happened in the tech industry in recent memory
—Sam Altman (@sama) January 23, 2023
Nearly 220,000 workers in the sector have lost their jobs
In addition, the tech sector is facing a difficult period in the context of high inflation and rising interest rates after a good period, especially at the height of the Covid-19 pandemic and the lockdowns. According to Naveen Sarma of the rating company S&P Global Ratings, technology groups must accept “ that they won’t grow as fast or invest in new products and services as much as they thought “. In this context, advertisers are more reluctant to incur advertising expenditure, which represents a significant part of the turnover of companies such as Google, Facebook or Twitter. According to the specialized site Layoffs.fyinearly 220,000 employees in the sector have lost their jobs in the United States since the beginning of 2022. “ Midnight struck for hypergrowth as tech companies splashed the cash like rock stars did in the 1980s “, underlines an analyst.