If Silicon Valley also had Chinese-style Internet celebrity street signs, then it would be very appropriate to write "I don't want to be laid off in Silicon Valley." Looking around, the financial situation of technology companies has been very good recently, but the wave of layoffs is still spreading. On January 31, Microsoft announced second-quarter revenue of US$62.02 billion, higher than market expectations of US$61 billion and setting a record for Microsoft's quarterly revenue. AI demand has contributed a lot to Microsoft’s cloud business revenue growth. Thanks to the positive financial report, Microsoft's market value once surpassed Apple's and became the world's largest.
Let’s look at Alphabet, the parent company of Google, which announced its financial report data on the same day. Its revenue in the fourth quarter of last year was US$86.31 billion, an increase of 13% from the same period in 2022, which was higher than analysts’ expectations of US$85.36 billion. The cloud business also achieved profitability for the first time. Google CEO Sundar Pichai attributed the growth to the company's investments in generative AI.
Financial reports are booming, but employees are complaining? Let us take a look at the recent layoffs of the two major technology companies, Microsoft and Google.
1.
If you look at domestic workplace dynamics, you have to look at layoff.fyi for layoffs in Silicon Valley. Data shows that in 2024, 103 technology companies laid off employees, and 28,963 employees lost their jobs. Among them, electronic payment company PayPal laid off 2,500 people with a stroke of a pen, while Microsoft laid off 1,900 people at the beginning of the year.
Looking back in 2023, Google, Meta, Amazon, and Microsoft will all be hardest hit by layoffs, with about 10,000 layoffs.
Specifically, Google's recently disclosed financial report stated that Google laid off more than 12,000 employees in 2023 and spent US$2.1 billion on severance pay and other expenses alone. And the cost of layoffs is still increasing. Just one month after 2024, Google has already spent US$700 million on layoffs.
In the post-earnings conference call, Pichai called 2024 Alphabet's "Gemini era," which is Google's AI language model, which is expected to be applicable to all Google's core products.
"Gemini is the first realization of the vision we had when we founded Google DeepMind, bringing together two of our world-class research teams," Pichai said. GeminiUltra will also be launched soon as an upgraded version of Gemini and will be embedded in Google's search products. This is exactly the same as Microsoft integrating ChatGPT into Newbing.
It is worth mentioning that although Google’s layoffs cost a lot of severance pay, it is expected to significantly reduce office costs (including in expensive places such as the Bay Area). According to statistics, Google will spend a total of US$1.8 billion in 2023 due to various necessary expenditures due to office closures.
After massive layoffs of 10,000 employees last winter, Microsoft last week announced plans to cut another 1,900 positions (about 8% of its workforce) in its video game division, which includes Xbox and Activision Blizzard.
Some media reported that Activision Blizzard has laid off 60 employees in the e-sports department, leaving the total number of employees currently at only 12. Overwatch League OWL host SoeGschwind posted on the
Microsoft's massive layoffs are not unrelated to its desire to focus on the AI track.
Microsoft Chairman and CEO Satya Nadella also expressed his determination to develop AI: "We have shifted from talking about AI to applying AI at scale. By letting AI penetrate every level of the technology stack, we are winning new customers and helping various business areas gain new profits and improve productivity."
2.
Looking through the popular posts on social platform
"See me unemployed on TikTok" has become a hot topic, and many unemployed people have made videos of their experiences and posted them on TikTok.
Many employees also had the foresight to prepare for reorganization and learn AI-related knowledge after the wave of layoffs last year. GitHub’s 2023 Octoverse report states that 92% of developers on the platform are using or experimenting with AI coding tools.
A CNBC report stated that technology workers are also giving up equity and so-called employment prospects in exchange for more stable development.
According to 2023 data from tech interview platform Karat, non-tech enterprise companies successfully hired nine out of every 10 job applicants, while large, growth-focused tech companies hired just two. In 2020, fast-growing technology companies attracted more job seekers, but economic fluctuations and a series of operations by technology companies have changed this situation, and non-tech companies have become more popular with job seekers.
“Just as investors are fleeing to safety, job seekers are fleeing to safety,” said Jeff Spector, president and co-founder of recruiting services provider Karat.
"Job seekers are sacrificing profits for safety."
This flight to safety makes sense given chronic high stress, sharp increases in the overall cost of living, and layoffs, in the sense that these factors break the filter that job seekers have for tech hubs like Silicon Valley and Seattle.
An employee from FAANG (the five most popular and best-performing technology stocks in the U.S. market, including Facebook, Apple, Amazon, Netflix, and Google) wrote in a Reddit post: "To be honest, I care more about money. I feel that changing companies is a better way to get what I want, rather than aiming for a promotion that may not necessarily happen."
Overall, 60% of tech workers are interested in leaving their jobs in 2024, up from 52% the previous year, according to technology recruiting platform Dice's 2023 "An Overview of 2023 Tech Sentiment" report. This provides significant competitive opportunities for non-tech companies to attract tech talent.
Non-tech companies in Silicon Valley are also beginning to attract talent with more credible promises, prioritizing cash rather than equity that may not hold its value in the short term. In addition, they do not limit their office locations to technology hubs such as Seattle and Silicon Valley, but allow job seekers to live in cheaper cities and reduce commuting time. In this way, the advantages of non-tech companies are further highlighted.
Dice CEO Art Zeile also pointed out the direction for job seekers, saying that the aerospace, consulting, health care, financial services and education industries are most in need of technology talents. In his view, technology workers can better achieve worklife balance in these companies.
3.
During the epidemic, many people chose to stay at home due to inconvenience in traveling, which also brought growth opportunities to technology products, consumer electronics, and online applications. Therefore, many major technology companies continued to expand and absorb talents during this period.
When users' lives return to offline, technology companies will inevitably reorganize their organizational structures. Strengthening one's skill set through artificial intelligence tools may be a new trend for practitioners in the global technology industry.
Only lifelong learning can shine everywhere.