In recent months, thousands of workers have been fired by Big Tech. We are talking about exceptional numbers: in fact, there would be 2,000 employees left home every day since the beginning of 2023. In particular in the United States, but not only.
Here are some examples: Google fired 12,000 people overnight, 18,000 Amazon, 11,000 Meta, 10,000 Microsoft, 8,000 Salesforce, 4,000 Twitter. In addition to Big Tech there is Disney (7 thousand people) followed, at a distance, by a whole series of subjects familiar to consumers, including Tesla, Netflix, Robin Hood, Snap, Coinbase, Ibm, PayPal, Zoom and Spotify, with figures however they are significantly lower than those mentioned above.
On the one hand you resign, on the other you invest in AI
This wave of cuts in the tech innovation sector has involved at least 70,000 employees worldwide (but some say as many as 200,000), not to mention those who voluntarily presented their resignations. Then there is the induced. In fact, the layoffs are starting a chain reaction in the consulting, marketing, advertising and online content production spaces. And this happens as companies reduce spending and redirect it towards innovation in artificial intelligence.
Yes, because while a company like Microsoft on the one hand does without 10,000 employees, on the other it invests 10 billion dollars in ChatGPT, the chat specialized in understanding human natural language.
The Real Reasons For Big Tech Layoffs At Google, Microsoft, Meta, And Amazon https://t.co/h5p8rNa8Ts pic.twitter.com/ededLSHN1q— Forbes (@Forbes) February 13, 2023
Yet Big Tech continues to make money
It is a strange crisis, that of Big Tech. Executives blamed the hiring glut that occurred during the pandemic, when the industry posted record-breaking revenues. In fact, just as the energy crisis was a good deal for the fossil fuel industry (with 4 trillion dollars in profits in 2022), so with the pandemic Big Techs did their best business: as summarized by the Corriere’s DataRoom della Sera, Google’s profit in 2021 was 76 billion (40 in 2020); for Meta it was 39.3 billion (29 in 2020); Amazon always had a net profit of 33 billion (21 in 2020); finally Microsoft brought home a net profit of 61.2 billion (44 in 2020).
But now there’s a global recession and tech companies have to cut spending, leaving staff at home. On the other hand, for every self-respecting capitalist company, there is only one goal: to make a profit. If this does not exist, logically, cuts must be implemented. But is it really so? Are companies losing money? The stock exchanges will also go badly, but the balance sheets continue to grow. The examples of Google and Amazon are enough, for which data for the third quarter of 2022 is available: +6% for the first and +15% for the second. Google (Alphabet) closed 2021 with a turnover of 257 billion: this is +40% on 2020. Amazon in the same year reached 469 billion in turnover, almost double compared to the pre-pandemic.
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Cruelty and dehumanization of the end of the relationship
Everyone knows how Elon Musk, the founder of Tesla, is a pioneer in the world of technology. But he was also a pioneer in starting this wave of tech cuts. At the end of 2022, immediately after acquiring Twitter through a troubled negotiation to say the least, he sent a dismissal email to 4,000 employees: a 50% reduction of the entire workforce. A surprise maneuver that was followed by many others.
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The Big Techs, the same ones that cry misery today, were until yesterday considered the realm of flexibility, creativity, attention to the needs of each collaborator. Today, in those same companies, tens of thousands of layoffs have been ushered in the door with an astonishing lack of empathy.Even Google, which has long topped the job charts, sent an email to thousands of people informing them that the company no longer needed them.
Instead, Microsoft staged a private Sting concert for its employees the night before it fired 10,000 of them. We don’t know how much the company founded by Bill Gates had to pay to have Sting to itself one night, but it sure seems like an outrageous expense at such a time.
Is Apple really an exception?
It seems incredible, but sudden and dehumanized layoffs like these have not attracted complaints from the giants. Is it because, in some cases, special severance pay exceeds the minimum legal standards? Amazon CEO Andy Jassy, for example, stated in the company blog that the company guarantees protections such as health insurance (a very sensitive issue in the United States) and support for job placement elsewhere. However, this does not apply to warehouse workers.
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Finally, you will have noticed it: among the names of the big Big Techs that are laying off, Apple is missing. There are those who argue that the Cupertino company has not launched into the mad rush to hire as done by its competitors and therefore has not had to reduce staff. It may be true, but the rebellion of Chinese Foxconn workers in December demonstrates how much labor relations represent a vulnerability for technology companies.
For years we have “consumed” smartphones produced by workers with lower wages than ours and, above all, fewer rights. Now that same crisis has hit those who work in the office, and not on the assembly line. It seems incredible, but never once has it been any executive or shareholder who has jumped. Do you want to see that it is also partly the fault of their irrepressible thirst for profit?
The article Why Big Tech is inhumanely firing thousands of workers comes from Valori.