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.