Actual Reasons for Layoffs at Tech Giants Meta, Amazon, Google, Twitter, and Microsoft.
Recently we have heard a number of layoffs news. Many small companies lay off from time to time in small numbers and these go unnoticed. But when these layoffs are done by tech giants like Meta, Google, Amazon, Microsoft, and Twitter, these are taken seriously all over the world and are demanded explanations for their actions. We already have covered news about layoffs by some of these in our FT Tech News series. Collectively, these tech giants have fired more than 150,000 employees in just the last few months. They all have their reasons for the layoffs and they all end up to the conclusion that they want to reduce costs because economic growth has slowed down all over the world. But this is not the actual truth.
Topics We Have Covered
Why these companies' reasons are not valid? What are the reasons for layoffs by Google, Microsoft, Amazon, Meta, and other tech giants? Who was laid off?In terms of roles and positions In terms of gender What are the people doing now after getting laid off?
Why these companies' reasons are not valid?
The conclusion drawn from their reasons all points towards the fact that they want to decrease the costs. Yes, we all can understand the reason and to some extent, we hesitantly agree to their reasons. But this is where they are all fooling us. Any reason for any decision is valid as long as they do actions relating to their reasons. But the actions done by these companies speak the whole truth. For example, Microsoft laid off around 10,000 of its employees and after that, we came to know that it invested 1 million dollars in ChatGPT of OpenAI and is planning to invest more in the future. This action tells that there was a commercial purpose behind the decision to spend $1 million which is equivalent to the laid-off employee. Likewise, Google is planning to lay off 12,000 of its employees which is 6% of its workforce. Again there is news about Google launching ChatGPT-like AI in the coming months and recently Google also launched a demo of its AI named MusicLM which can generate music from texts, humming, and whistling. I don’t think I need to remind you what Twitter did, do I? But for a few who don’t know then let me explain in very few words. When Elon Musk took over Twitter and became the new CEO, he fired half of its employees. So now what is the main reason for these tech companies' huge layoffs? Below is the data shared by data experts at 365 Data Science when they tried to get to the bottom of this.
What are the reasons for layoffs by Google, Microsoft, Amazon, Meta, and other tech giants?
The pandemic situation is not that surprising. It is quite obvious, right? During and after the Covid, these companies hired a lot of talents, more than what they usually hire. This also resulted in record-breaking sales and revenues. Now let’s do the analysis. Since the people who were hired during and right after the pandemic, their experience at work will be roughly two years. So a fresher who is just laid off has not had enough value from the company's point of view. So by laying off, these companies are just trying normal the situation in terms of hiring and number of employees. But this is not the whole story. You must be thinking that if these companies laid off only freshers? The answer is no. According to 365 Data Science, the average experience of employees who was laid off was found 11.5 years. This means those who were working for more than 10 years also got laid off. We can assume that freshers have tasks that can be done by others or even be automated. So they might have fired them but why they fired the experienced ones? The answer is that older employees receive higher salaries and firing them could help these companies meet their financial requirements. Also Read: 7 Legit Reasons Why People Don’t Buy Tesla Cars (Maybe after knowing it, you won’t either)
Who was laid off?
In terms of roles and positions According to 365 Data Science, people working within the HR department were among the most affected. About 28% of the layoffs were from HR. This is relatable because firing staffs mean they are not thinking about the recruitment of staff any time soon. So no recruitment means very little need for HR staff. Another reason for HR layoff is that many functions and tasks of HR can be automated. There are currently many platforms in the market that try to automate typical operations associated with interviewing and onboarding new personnel, such as checking references, validating IDs, and conducting health and safety checks. For example, Amazon already uses AI to identify less productive workers and fire them. Roles of talent sourcing and HR were affected mostly in Meta and Microsoft while software engineers were the main affected job category at Google and Twitter. In terms of gender It has been a topic of debate over the years that females also should be given opportunities, especially in the tech industry. To some extent, these companies have done well to balance the gender ratio by giving new opportunities and this data has significantly improved. But we all were surprised to see this new data about layoffs of these companies. The data revealed by 365 Data Science shows that about 56% of those who were laid off were female. This is showing a really bad message to the public and is kind of demotivational for the females who are potentially the best in this field.
What are the people doing now after getting laid off?
The data shows that only 10% of the laid-offs have posted for new jobs so far on their Linkedin profiles. It might be because they are taking some time off for themselves before going on job hunting. Another thing could be they all might head into self-employment or the freelance gig-like industry. Only time will tell. Read the full article