Nearly 24,000 people have lost their jobs in the f

U.S. stocks were in jubilation last week, with the S&P 500 Index (SPX) hitting a record high and the Nasdaq Composite Index (IXIC) hitting its highest level in two years. Alphabet's (GOOGL.O) stock price hit a new high on the 25th, and the market values ​​of Microsoft (MSFT.O) and Meta Platforms (META.O) also exceeded US$3 trillion.

However, the employees of these companies are not happy at this time. While the artificial intelligence craze is rising, the wave of layoffs has not stopped. These technology companies have begun to rearrange their layout and accelerate layoffs due to the influence of artificial intelligence.

According to data from the Layoffs.fyi website, 85 companies have laid off about 23,670 employees since January this year. This is the most since March last year, when nearly 3,800 people in the industry were laid off.

Among them, U.S. technology company Amazon (AMZN.O) has laid off hundreds of jobs in its Prime Video, MGM Pictures, Twitch and Audible divisions. Game developer Unity announced that it will lay off about 25% of its employees, Discord will also lay off 17% of its employees, and Microsoft's gaming department will lay off 9% of its employees, about 1,900 positions. eBay (EBAY.O) plans to cut 9% of its workforce, about 1,000 positions. Salesforce (CRM.N) announced that it will lay off about 700 people, accounting for 1% of its global workforce.

The wave of layoffs is not limited to the United States, but has also spread to Europe. German software giant SAP announced plans to conduct a company-wide restructuring in 2024, which will affect about 8,000 employees, accounting for more than 7% of the total number of employees. It is reported that these employees will be included in retraining and other plans, that is, employees are encouraged to voluntarily leave or transfer internally.

This week will usher in intensive earnings reports from technology stocks. Alphabet, Amazon, Apple, Meta and Microsoft will all announce results. Investors are optimistic about the measures taken by companies last year in response to rising inflation, interest rate hikes, recession concerns and a severe market downturn in 2022. Appreciate the cost-cutting measures. Although the current economic outlook has improved, companies are still cautious and restrained in cost control after the last round of winter.

Layoffs reached their peak in January last year, when 277 technology companies laid off nearly 90,000 people, and the technology industry was forced to face the end of a more than decade-long bull market. Most of the resizing work took place in the first quarter of 2023. As of September last year, the number of layoffs had only declined month by month, but it rebounded by the end of the year.

The surge in layoffs in January signals a realization that more can be done with less as companies begin to budget for the year ahead.

Meta CEO Zuckerberg said that 2023 will be the "year of efficiency", with the stock price rising by nearly 200% and laying off 20,000 people. Across the industry, artificial intelligence has become a rallying cry, with new generative AI technologies demonstrating the possibilities of automating customer service, booking travel and creating marketing campaigns.

Rearranging the layout for artificial intelligence

The hype surrounding artificial intelligence has raised many concerns across the economic spectrum. As technology becomes smarter and demand for labor continues to decline, technology companies have begun to reduce headcount in some operations and instead invest more in AI product development. Art Zeile, CEO of DHI Group, which owns tech recruitment platform Dice, said:

"In general, these companies are reducing headcount associated with unsuccessful product lines or divisions as they look to reposition themselves for AI."

Nigel Vaz, chief executive of consulting firm Publicis Sapient, said some companies are following the lead of Meta and Salesforce, which took massive cost-cutting measures last year. Meta's stock price last year hit its best since Facebook listed on Nasdaq in 2012. In one year, Salesforce's stock price has nearly doubled during the same period, its best performance since 2009.

Article forwarded from: Golden Ten Data

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