At the beginning of the new year, in Silicon Valley, many employees received the first New Year's gift, turned out to be layoffs, although everyone on the phenomenon of layoffs, has long been commonplace, strange, but this round of layoffs is very fierce, in a month, 105 technology companies have laid off 28,963 employees, the number of layoffs is more than 3 times that of last month, including both start-ups, there is no lack of technology giants, so far this year, the top three companies in the layoffs are PayPal, Microsoft and Unity Software laid off 2,500, 1,900 and 1,800 layoffs, respectively.
According to data from Layoffs.fyi, from 2022 to 2023, American technology companies have laid off more than 500,000 employees, and after two consecutive years of layoffs, the time has just entered 2024, and a new wave of layoffs has struck again, nearly 30,000 people have lost their jobs, which makes those who are lucky enough to survive can't help but tremble. Although he escaped this catastrophe, he doesn't know if the next person to be laid off will be himself. In the long run, layoffs will remain one of the keywords for the development of American companies in the next few years, with Citibank planning to lay off 20,000 employees in the next two years and transportation giant UPS planning to cut 12,000 employees to save $1 billion in cost expenditure.
The only consolation is that this year's wave of layoffs seems to be much gentler than last year, when 277 companies announced layoffs and nearly 90,000 people lost their jobs.
Why do U.S. tech companies keep laying off workers? In the final analysis, there are two main reasons:
The first must be to cut costs, streamline the organization, and improve efficiency, which is what we often call reducing staff and increasing efficiency. This is a common topic, but this wave of layoffs, its strength and scope, is indeed beyond the expectations of many people, such as Google's plan to lay off more than 1,000 people, its distribution covers search, maps, advertising, shopping, Judging from the financial report data, the performance of these layoff technology giants is not bad, with increased revenue and huge profits, which shows that layoffs are not forced to survive, but to make more money, so they have to cut down those departments that do not make money.
Meta laid off 20,000 employees last year, the company's stock price rose by nearly 200%, the current global economic recovery process is still less than expected, although the U.S. economic growth reached 3.1% last year, but its domestic is still facing the most serious inflationary pressure in 40 years, the Federal Reserve from 2022, a number of consecutive large interest rate hikes, technology companies have also lowered their performance growth expectations, for long-term consideration, companies need to lay off employees, reserve more winter ammunition.
Another reason that cannot be ignored is that AI is coming to grab jobs, and the current influence of AI can be said to be increasing day by day, and the era of AI replacing labor is accelerating, and investing in AI has become a priority for many companies when formulating future development strategies. According to Piper Sandler's data, 62% of companies are willing to invest resources in the field of AI, which has doubled compared to last year, and many jobs will be gradually replaced by AI in the future. Pichai wrote in a Jan. 17 memo that the company will continue to invest in artificial intelligence, with more layoffs set to occur this year, and Amazon Web Services (AWS) announced on Jan. 19 that it intends to invest 2.26 trillion yen ($15.24 billion) in Japan by 2027 to expand cloud computing infrastructure and further enhance the competitiveness of enterprises in the field of artificial intelligence services.
According to this trend, most jobs will be replaced by AI, and it is only a matter of time, the more advanced artificial intelligence technology, the less manpower is needed, and the employment opportunities for ordinary people will also be greatly reduced, so it is really a wise choice to have fewer or no children, then the question arises again, if most people are unemployed, people have no money in their pockets, who can those produced goods sell to?