In the past two weeks alone, we've reported on Microsoft cutting 1,900 jobs and Google announcing its intention to lay off employees to focus on "big priorities." If we expand the time frame to a few months ago, we can also see companies such as Meta, Intel, Unity, Amazon, etc. laying off employees or announcing their intention to lay off employees.

Currently, many large technology companies are laying off hundreds or even thousands of employees, while their stock prices have reached all-time highs. Will this be the beginning of a big change in artificial intelligence? While layoffs at major tech companies are nothing new, there is a clear asymmetry in the layoffs that may indicate we are in a different era of business decision-making. All of the companies mentioned above (except Unity) have had their best stock performance in years, and in some cases, ever.According to traditional theory, layoffs are part of cost-cutting measures when a company or the economy as a whole is in trouble. But the latest layoffs come at a time when companies are at their richest and the U.S. economy is doing well.According to data from the Bureau of Economic Analysis (Bureau of Economic Analysis) under the U.S. Department of Commerce, the U.S. gross domestic product (GDP) increased by 3.3% in the fourth quarter of 2023, while the growth rate in the third quarter of last year reached an astonishing 4.9%. The Nasdaq is currently at its second-highest all-time high, behind only its brief peak in early 2022. According to the U.S. Bureau of Labor Statistics, the overall unemployment rate remained at a healthy 3.7% in December 2023.

If businesses and the economy are doing well, then the question arises: What caused the tech industry to lose nearly 25,000 jobs in less than a month in 2024? The most likely answer seems to be a wholesale shift to artificial intelligence.Google's memo announcing "ambitious goals" and "significant priorities" for layoffs comes a week after they released their latest generative AI model, Lumiere. Shares of Google parent Alphabet rose 57% last year.In October 2023, Meta announced layoffs, but this month announced its intention to purchase 350,000 Nvidia GPUs for artificial intelligence work. Last year, Meta's stock price rose 168%.Over the past two months, Amazon has laid off hundreds of employees at its Prime Video and MGM studio divisions, as well as about a third of the workforce at streaming platform Twitch. Amazon shares are up 58% from a year ago.However, this trend is not entirely consistent. Microsoft and Unity stand out among companies that have recently laid off employees. In Microsoft's case, most of the 1,900 layoffs came after the acquisition of Activision Blizzard, while Unity's layoffs come after a troubled year for the company. So in these cases, layoffs appear to have a more normal explanation. Still, Microsoft is certainly a major player in the AI ​​space, with a partnership with OpenAI and Azure services, so they may follow the lead of their tech peers and continue cutting jobs at non-AI businesses.

It’s important to note that the AI ​​products offered by these companies were not necessarily the root cause of the layoffs, but rather the dramatic shift in companies diverting funds toward AI efforts. But this may be just the beginning of a worrying trend in which businesses believe they need fewer staff to provide the same service to customers.Apparently, at least in the tech world, jobs are being lost even when companies are doing particularly well. And, in most cases, the companies that have laid off employees have been very upfront about their commitment to building AI and integrating it into their products, services, and ways of working.One wonders, if trained, skilled workers in these ultra-competitive workplaces are becoming the replacement for artificial intelligence, what good sign does that bode well for millions of other workers around the world?