Unknown: Hi, Bernie. Hi. Thanks for meeting with me.
And Rosie. We have an important meeting today. We finished our evaluations of 2023 performance.
This is where you have not met Cloudflare expectations for performance. We've decided to part ways with you. Yeah, I'm gonna stop right there.
This is a viral video posted by Brittany Pietsch, a former employee of CloudFlare, a San Francisco based tech company. The video posted on January 2024, and got so much attention that it may have kicked off a new sub genre of viral video watch this person get laid off in real time. The tech industry is again seeing widespread layoffs after a rough 2023 LinkedIn just laid off nearly 700 employees.
Qualcomm is planning to cut more than 1200 jobs Google Amazon and Snap are among the companies continuing to downsize in the start of 2024 seems no different as layoff announcements, especially in the tech industry continue to make headlines. Units affected they also include hardware engineering, ad sales so far last night CEO Sundar Pichai told his workforce to expect more cuts Kate Rooney: and Amazon spokesperson did confirm those layoffs ahead of prime and prime video and MGM saying in that memo that the company is making some of the cuts to prioritize investments for the long term. layoffs Unknown: are also plaguing industries like healthcare, banking and media, whoever the tech industry is the one that's been dominating the headlines.
This Devyn Rafols-Nunez: layoff and everything that's happened in tech, I think is pretty eye opening. You know, like, you can have your dream job, you can have your Oh, it's my dream to work for Microsoft or it's my dream to work for AWS. And you get there and you realize, huh, okay, it's just like any other job.
It's a great place to be. There's a lot of great perks, but at the end of the day, you can get rid of you like that Unknown: the layoffs to the start of 2024 signal a dramatic shift in the tech industry, we're going to continue to see layoffs happen as the future of work has changed as the future of technology has changed. And as investors the appetite for risk and growth versus profitability has dramatically changed as well.
So why are big tech companies and other industries laying off 10s of 1000s of workers at a time when the US economy looks strong on paper? The start of the Covid 19 pandemic was a dire economic event, at least at first. The tech industry though, boomed in 2020, Tech's top seven companies added $3.
4 trillion dollars in value. The feds emergency moves to bolster the pandemic hit economy, like cutting interest rates to near zero helped boost tech stocks. This move helped the tech industry to expand and went on a hiring spree as people were confined to home.
Amazon added the most number of employees during this golden period peaking at 1. 6 million employees in 2021. If you rewind before the layoffs, all the tech companies were really putting an emphasis on growth.
And so capital was really cheap, you know, so you could get loans, you could get money access to capital was really affordable. And then you see as interest rates went up, and you start to see that that growth in headcount didn't translate to growth and profitability. And access to capital became quite a bit tighter, you saw many companies start to hit the panic button.
And so we see saw these 1000s and 1000s of people get laid off all at once. And that was quite a shocked 80% of Twitter either left or quit or was pushed out laid off whatever you want to call it. And yet the website still runs.
Do you think people are looking at Elon Musk and thinking, You know what, we really need all these people. I do get Elon Musk credit for this for kicking off and making this acceptable Twitter, but a lot of the big companies decided to get lean and efficient. And you know, this is where you kind of start to see the incredible leverage of what these tech platforms really have, which is they didn't need those people, right?
They were hoarding the talent. It was an option that and it was a cheap one for them. Yeah, I asked every tech CEO, do you take inspiration for what Elon does?
And they'll say on the record? No, we don't we would never want to do that. But, you know, in the group chats, they're all like, wow, that was an amazing move.
The artificial intelligence hype of 2023 is starting to have real world effects in 2024 major tech CEOs are doubling down their investments in AI. In January 2024, meta CEO Mark Zuckerberg announced his plans to build an artificial general intelligence known as AGI everyone. Today I'm bringing Meta's AI research efforts closer together to support our long term goals.
Building general intelligence, open sourcing it responsibly, and making it available and useful to everyone in all of our daily lives. All this investment in creating AI jobs, but at the end spends of others, the recent report from indeed shows that the number of job posts containing Gen AI terms has been surging. So there's about a 500% increase in the number of jobs that mentioned generative AI, there's about a 6,000% increase in the demand from job seekers for these jobs.
But there still is, I think, a mismatch the other way, and that the total amount of demand for AI talent far outstrips the number of AI professionals, every company in every industry is trying to figure out how to use AI in everything they do. I mean, AI is going to create a lot more jobs as well. But at the same time, I would say that there will be jobs that will be automated.
So you the AI has already hit the business effectively. Oh, absolutely. Absolutely.
Especially in the tech sector. I mean, they've been talking about it for years. Now, the fact that you have more companies moving towards artificial intelligence, and they're looking at the fact that as opposed to paying somebody 200 $300,000 a year to do the job, I can actually use artificial intelligence to do the job that they used to be able to do this AI thing is real is not going away, and they can't have people holding them back.
And so what they've been doing over the past year is finding places within the organization that they can trim so that they can get to a place where they're shipping faster, take managers out, and then engineers who are skilled for a previous generation of technology, they're also leaving to make room for people who are more skilled for artificial intelligence, AI is definitely playing a role in the layoffs that we're seeing. Automation has increased efficiency for some of the workers who are able to utilize AI to make marketing decisions to analyze data to serve customers more efficiently and effectively. So AI is a paradigm shift that is changing the way people work and changing the priorities of tech companies.
Right now, I don't see that there's a big impact from AI in these tech layoffs. Some businesses have maybe cited that they're trying to, you know, shift priorities, and they're letting some employees go to focus more energy on some of these generative AI tools. But I think it's important to say that, that's very different than saying that companies are, well, we can let people go now because you know, general AI, and all these tools are taking jobs.
The tech industry used to have this shiny image of having big salaries, and unlimited perks. But the recent tech layoff stories have completely shattered that image. Devyn Rafols-Nunez: I really don't have any regrets about posting it or what's happened.
I think the bigger picture is that I've been able to be a voice for people who have gone through something similar. You know, the stories that I've received are people who were laid off 2030 years ago, and they still remember to this day, how that made them feel, and it did not make them feel good. And I think that we should shed light on stuff like that.
So we can make a change, otherwise nothing will change. In Unknown: my experience, the public sharing of things like one's layoff I think, is partially due to the fact of the rise of social media such as tick tock, even YouTube shorts, people are becoming much more comfortable with sharing their experiences. And oftentimes when layoffs happen, people feel shame when they are being laid off.
In reality, though, oftentimes if people are being laid off, it's a failure of leadership of that company. Tech companies that conducted widespread layoffs have seen a bounce in their stocks. The tech heavy NASDAQ climbed to 43% in 2023.
Its best year since 2020. Meta was the biggest gainer among big tech surging over 194%. The tech stock boom also helps boost the wealth of tech billionaires, the super rich CEOs saw their wealth grow by 48%, or $658 billion in 2023.
Let's hard particularly for a company like Google, which over the past 25 years hasn't gone through a moment like this. But you know, we've always deeply cared about our employees. We also note the sign of negative developments that are in some sense a sign of positive developments of a greater demand for the services and automation and activity improvements.
Now we see the stock market reacted quite favorably to this round of layoffs. We see these record stock prices for a lot of these tech companies. And so the stock price the investors really favored profitability, really favored this lean year that these tech companies had.
And so instead of rewarding the growth that we saw in them all pursue years ago, they're now rewarding profit. And so the layoffs have continued. People have become used to them, and regrettably, and sadly, it seems that the layoffs is going to be the new normal.
data suggests an influx of layoffs in the tech industry, starting from the second half of two At 22 and peaking and 2023 some non tech sectors are also seeing widespread layoffs. A prime example is ups the courier giant raised eyebrows by announcing 12,000 job cuts in January. The media industry isn't immune to layoffs either.
And 2023 to industry shed over 20,000 jobs in 2024. It looks no different as big names like Paramount NBC Sports Illustrated The Los Angeles Times all have announced major job cuts in early 2024. The banking sector is also not shying away from cutting jobs, Citigroup, Morgan Stanley Deutsche Bank, or some of the big names that have already announced their layoff plans for 2024.
It's worth noting that even though these mass layoffs continue dominating headlines, labor markets still seem strong. The US economy added 353,000 jobs in January, much better than the Dow Jones estimate for 185,000 jobs. But the unemployment rate held at 3.
7%. Against the forecasts for 3. 8%.
Experts are divided on whether the recent tech layoffs would trickle down to non tech sectors. Looking at the current job market right now, there's no evidence that we're going to see any trickling obviously, you know, kind of the jury's still out. It's still early to tell.
But it's interesting as we look back, and 2023 2023 was a year of a lot of layoffs in the tech industry. And we didn't see any of that trickle out. Even within the tech industry, which is usually the government usually defines it as the information sector.
We didn't see a very high layoff rate. So we saw a lot of companies announcing layoffs. But those companies kind of carried an outsized share of the media, because then once we rolled it all up, there was maybe about 1% of employment that was being laid off.
So really, ultimately, the overall rate of people losing jobs to layoffs, remains near historic lows. It hasn't yet trickled down to the rest of the economy as we're seeing the stock prices really high unemployment fairly low. But at some point, if this continues, both companies and individuals are going to have to cut back spending and that has consequences that reaches far beyond the tech industry.
