Analyze the cause of Big Tech’s big lay off at the beginning of 2024; Is it really because of AI?

Since the beginning of the year, many famous big tech companies such as Google, Apple, Microsoft, and Meta have been laying off their employees continuously and tend to lay off more. According to Layoffs.fyi, a website that collects layoff information around the world since the COVID-19 pandemic up to the present, found that in less than a month this year, at least 34,250 employees have been laid off by 141 tech and start-up companies.
(Information on 13 February 2024)

Although the global situation has returned to normal after the outbreak,Why is the famous company continuing to lay off people? Is it really because AI is going to replace all the employees? This time, ACU PAY will be analyzing the causes of layoffs worldwide.


Which tech companies have laid off their employees since early this year?

This year, none of the tech companies have been laid off for tens of thousands as they did last year. The German software company SAP has completed restructuring, which has affected 8,000 job positions. In this amount, they will be both laid off and transferred again this year.

Amazon has laid off 18,000 employees, accounting for 1.1% of 1.6 million employees. The affected departments are Amazon Stores and People, Experience, Technology (PXT).

Alphabet, the parent company of Google, laid off 12,000 employees, accounting for 6% of all employees. 

Microsoft laid off 10,000 employees, accounting for 5% of all employees, to restructure its organization and focus on AI projects that the company sees as long-term growth.

While Cisco has laid off 4,100 employees, accounting for 5% of its total workforce, to balance the organization.

In addition to technology companies, transportation and logistics companies have laid off more than 12,000 employees, financial firms have laid off 30,000 employees, and many in the automotive and music industries and media sectors.

The key reasons of lay off

  • Uncertainty in the economy and overemployment

Dr. Santitharn Sathiarnthai, Economist of the Future and Monetary Policy Committee (MPC) said that during the epidemic, it was the golden age of technology companies because people all over the world jumped into digital services. People are turning to do everything online, creating a huge increase in Data and Digital Footprint, an era of tremendous technology funding. However, as the world returns to normal, digital demand is decreasing. As a result, companies have to adjust accordingly. 

Roger Lee, founder of Layoffs.fyi also said that one of the reasons for this layoff may be the excessive employment rate during the COVID-19 pandemic. Many technology companies are still trying to solve this problem, and it is also due to economic uncertainty such as interest rate hikes and technological slumps that have lasted longer than initially expected. 

  • Company restructuring

It’s common for rapid changes in innovation and technology, making companies adapt their working systems to be appropriate and maximize productivity. As a result, many technology companies have reduced costs and restructured their departments or positions that do not suit the company and turned to investing more in AI.

For example, in a famous tech company like Google, CEO Sundar Pichai, warned employees that there will be more job cuts this year as the company is continuously investing in AI to compete with Microsoft’s OpenAI. 

  • The company uses more AI

Whether it’s Google, Microsoft, or SAP, a German enterprise software company, has directly revealed that it will focus more on AI artificial intelligence. That’s because AI will be a technology that is important to our lives in the future, so companies tend to focus on investment in AI and reduce the human workforce to make profits inevitable.

Despite how advances in AI have laid off employees, recruitment in this sector is increasing, with more and more companies reportedly opening up AI-skilled employees. According to CompTIA, 33,727 job applications for related fields were announced in January alone, the largest monthly increase in 12 months, mostly researchers, engineers, and developers working with AI.

All of this may be just the first wave of generative AI to replace some of the human work and skills, and it may continue to increase in the future.


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