Since tech stocks started plunging last year, the industry — with Meta Platforms Inc., Alphabet Inc. and Amazon.com Inc. are the most prominent companies – have conducted mass layoffs in order to have the right number of employees after the massive recruitment during the epidemic period. Companies are also under pressure to appease investors, who are just starting to focus on profits rather than growth and boom. The layoffs created a gloom across the entire labor market, with workers worried about whether the contraction would spread from the tech sector to other parts of the economy the way they did. made during the dot-com boom of the early 2000s.
But an unexpected savior has come to the rescue of tech workers, at least for now. Companies and investors are exaggerating what artificial intelligence means for future profits and worrying about what it means if they are left behind. And while AI could eventually destroy millions of jobs, the products and services responsible for that do not yet exist. Companies have to build them, and they’ll need tech people for that.
After a year of layoffs, the past month has given us evidence that tech jobs are stabilizing, maybe even picking up a bit. The layoffs.fyi website has tracked tech layoffs since the start of 2022. After the highest increase of the year in January, the number of employees laid off has fallen for three consecutive months. April saw as many layoffs as we saw last October.
If job cuts are the result of over-hiring during the pandemic and falling stock prices, there will come a time when companies have done enough. A year is a pretty long time to adjust to headcount, and tech stocks have rallied quite a bit over the past few months, suggesting that investors are pleased with the progress. During the company’s earnings conference call last week, Meta CEO Mark Zuckerberg said the company would conduct a third round of layoffs in May, but after that, “we’ll have a stable environment.” much more determined for its employees.”
With stock prices steady and headcount now consistent, tech companies’ theme this quarter is AI: What it means for businesses and their investment plans to capitalize on it. It. I don’t believe in the value of the investments we’ll see tech companies make in this direction. After witnessing all the white whales the industry has pursued in recent years, from autonomous vehicles to voice assistants to metadata, I’m not sure investors should feel the same way. pleased with what is to come.
But tech people should breathe a sigh of relief at this development. No one is going to build an AI empire by continuing to cut jobs — or at least, that’s what investors will assume. If you’re still cutting jobs in the second half of 2023 while Microsoft Corp. and Zuckerberg is investing in AI, then maybe you’re either an asshole or you don’t have an AI plan. No CEO can afford that perception.
Interestingly, there is evidence that the shift from cost-cutting to investing in AI has emerged in labor market data. Job site Indeed.com tracks job postings over time, and since mid-April, new listings — those posted within the last seven days — for software developers have increased by 30 %. It’s a volatile series of data, but its gains and timing make sense as stock prices recover and the company’s commentary on staffing levels and AI plans.
If AI eventually becomes the job-destroying force some fear, we’ll cross that bridge when it comes to it. In the short term, the promise — or at least the hype — of AI is shifting the mentality of tech companies from profit-maximizing cuts to another potential arms race as companies fight for the future. And that could be good news for everyone. A steady job market for tech workers is another bulwark against the recession most people continue to fear, but that continues to be pushed back into the future.
