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Tech Layoffs

Google lays off its workforce to significantly invest in AI

Google lays off its workforce to significantly invest in AI

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Sundar Pichai, the CEO of Google, and Brian Saluzzo, a Google executive who heads a team of developers, advised their workforce to quickly adopt AI in their operations to increase productivity as the tech giant seeks suitable ways to curb the rise in expenses.

In an audio recording obtained by CNBC, Pichai pointed out that earlier, when companies experienced a period of massive investment, they responded by adding more workforce. However, the CEO stated that this has taken a new shift with the increased adoption of AI in the sector.

In this AI era, he anticipated that the technology needs to be applied in the company’s daily operations for a firm to achieve more success in its productivity.

Several tech companies embrace AI in their productivity 

There is a widespread trend among tech companies that invest significant amounts in constructing large data centers that can support huge AI models and manage heavy workloads. The companies are trying to reduce costs in other areas to achieve this significant investment.

An example of this tech company is Google. According to recently released reports, it is eyeing an investment of around $85 billion to boost capital expenditures this year. This is a 10% increase from the last investment of around $75 billion.

During a meeting, Pichai highlighted that the competition in the tech sector has become stiffer. According to his research, some firms will prioritize enhancing their employee productivity, urging that this is a good strategy; hence, they should consider it too.

Similar to Google, Amazon has also shifted its focus towards AI. Andy Jassy, the CEO of Amazon, shared a message with the employees, mentioning that since the company has increasingly adopted AI generative tools and agents, it will soon lay off some corporate staff. 

In the meantime, Jassy urged the employees to quickly explore using AI tools in productivity and teach themselves how to work effectively with fewer people in their teams.

The same month, Julia Liuson, the president of the Developer Division at Microsoft, addressed employees, stating that at this time, adopting AI in their daily operations was not an option.

This came after Tobi Lutke, the CEO of Shopify, pointed out that tech companies expect their employees to learn to use AI in their daily operations quickly. Afterwards, Lutke stated that before teams request additional staff or resources, they should explain why they cannot achieve their goals using AI.

Google lays off its workforce to significantly invest in AI

Alphabet, the parent company of Google, has significantly reduced its workforce in the past few months. To illustrate, in 2023, it started off with around 191,000 full-time workers. This figure drastically dropped to around 187,000 as per last month’s data. Even if it has increased its workforce, it is only a very small percentage, reports from sources reveal.

Concerning its layoff, Google began cutting off 6% of its workforce in 2023 across various departments. This did not stop at this point; it has embraced the trend to date. Analysis from sources revealed that Google has continued reducing its workforce since the year began, while giving employees buyouts.

In a statement, Pichai expressed that this is a time to make significant investments, and therefore, caution should be exercised while managing the company’s resources. Concerning Google’s advancements in AI, the CEO mentioned that he was pleased with the progress as it aligned with his goals: to improve the firm’s effectiveness and productivity.

Google declined to respond to a request for comment immediately.

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Microsoft’s Satya Nadella says that the job cuts have greatly impacted him

Microsoft’s Satya Nadella says that the job cuts have greatly impacted him

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Microsoft has mainly focused on making significant investments in AI. This has resulted in the tech company laying off almost 15,000 workers this year. The pressure from this layoff has greatly affected Satya Nadella, the CEO of Microsoft.

In a memo to employees, Nadella addressed the recent job cuts, which he believes have raised controversy among individuals.

He referred to the situation as a threat that hinders success in an area with no franchise value. According to Nadella, progress is complicated: sometimes it experiences several changes while other times it is conflicting, all in all posing a challenge to the company’s operations.

Despite these challenges, the CEO highlighted some benefits behind the layoffs. He expressed that the layoffs acted as a new beginning to take a different turn, shaping one’s future and resulting in effective leadership. He concluded that layoffs significantly impact the company’s operations more than anything else.

Tech firms initiate increased layoffs in their workforce amid growing demand for AI

Following data from sources,  Microsoft started its operation with 228,000 workers in June 2024. A week earlier, it revealed intentions to lay off around 9,000 workers from its workforce. This has resulted in reduced investor confidence. On July 9, the stock’s closing price was over $500, creating an unstable situation that might greatly affect market prices to drop drastically.

The exact figures for this year’s layoff have not been made public. However, based on Satya Nadella’s argument, Microsoft’s workforce is still roughly unchanged.

Recent analysis has revealed that Microsoft’s act is a growing trend in the tech ecosystem, with several companies considering laying off their workers amid increased adoption of AI. Based on the analysis from sources, 80,000 positions in these firms have been eliminated.

Another example of a tech company that has adopted this trend is Recruit Holdings. The company revealed intentions to lay off around 1,300 jobs, mainly in its human resources technology unit, so that it can focus on making significant investments in AI. The unit comprises the Indeed and Glassdoor platforms, which entail job hunting and information on career opportunities.

Regarding the company’s large size, several Microsoft workers demonstrated disappointment with its decision to lay off employees on social media platforms.

One of the workers, a director at Microsoft, expressed that the company’s working experience was memorable. However, the worker said the company’s layoff action betrayed their loyalty. According to the representative, the company’s set value did not apply to its crucial decision-making processes. 

Nadella calls on the urgency to embrace Microsoft’s long-standing mission 

Microsoft has gained the most value in terms of global public company rankings. Still, Nvidia leads this ranking. This is because, as tech companies shift their focus towards AI, its chips are essential to sustain them in this tough competition. Microsoft’s increased value is driven by its Windows and Office products.

In a recent memo, Nadella explained that AI had transformed Microsoft’s long-standing mission. The mission was to push each and every individual and organization globally to strive for more.

The CEO called on the company to firmly embark on the mission. “What does it mean to empower people in the age of AI?” Nadella asked. Based on the question, he argued that the aim is not just to develop tools for certain jobs or tasks but to develop tools that allow everyone to make their own tools.

Nadella stressed the importance of embracing this vision — a shift from being a software factory to becoming an intelligence engine that empowers every person and organization to build what they need to thrive.

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