The ‘winter’ of the tech industry can’t be over anytime soon

The auditing firm PwC has predicted that artificial intelligence (AI) will create a $15 trillion increase in global GDP by 2030. Along with that, about 3% of jobs will be stolen by AI.

The recent big layoff of Google is an alarm bell for many people. Specifically, Alphabet – Google’s parent company – announced it will lay off about 12,000 employees, equivalent to 6% of the workforce.

In a notice sent to employees on January 20, Alphabet CEO Sundar Pichai said the layoff was a difficult decision. The company’s management decided to cut staff after carefully assessing Alphabet’s business and to adapt to the market context.

Sundar Pichai – Alphabet CEO (Image: AP)

Alphabet has emailed employees who have been laid off. Employees in the US will be affected first.

The job cuts affect all of Alphabet’s divisions, including hiring, engineering, and multiple product groups.

It can be seen that Alphabet is the next name in the long list of technology companies that have had to lay off employees in recent months. Before that, other giants such as Meta – the parent company of Facebook, Amazon and Twitter also announced the layoffs of thousands to tens of thousands of employees. Observers said that Alphabet’s move clearly showed that the “winter” of the technology industry could not end soon.

Bloomberg statistics show that, in 2022, the technology sector in the US has cut more than 97,000 jobs, an increase of 649% compared to 2021.

Number of jobs cut in the US tech industry in 2022

However, this wave has not stopped. In just the first two weeks of 2023, e-commerce giant Amazon, online video sharing platform Vimeo and cloud data software company SalesForce announced tens of thousands of staff cuts, bringing the total number of jobs. The tech industry’s cut to more than 110,000.

However, this dismissal move did not surprise observers. Mr. Joseph Bonner – market analyst at Argus Research (USA) – said that the layoffs of Amazon or Alphabet are not too surprising given the context that we have seen similar moves from Meta or Microsoft. Executives have also voiced the need to cut costs. Their decision is in line with the overall picture of the tech industry.

During the COVID-19 period, thanks to subsidy packages from the government, people spend to study and work remotely, prompting businesses to invest heavily to meet demand. However, when demand for spending cooled, technology businesses had to adjust their business operations.

According to Mr. Alex Zukin – CEO of enterprise software company Wolfe Research (USA), technology companies do not have much difficulty to cut 10 or 15% of their staff size, especially after they have completed their work. Recruited a lot over the years.

Alex Zukin – CEO of enterprise software company Wolfe Research

Some technology experts say that these layoffs are not necessarily bad news when this shows that technology businesses are in the process of restructuring to operate more efficiently. Those who are laid off, if they have skills, can still be employed in more suitable places.