Tech Giants Give Longtime Employees a Massive FUby@sheharyarkhan
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Tech Giants Give Longtime Employees a Massive FU

by Sheharyar KhanJanuary 25th, 2023
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Corporate America has been looking to become leaner since at least mid-2022 after it became clear that its expectations for growth — fueled by the now defunct COVID-19 pandemic — were beginning to falter.

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We're not going to mince words here. Tech giants gave their employees a massive FU this past week, aggressively cutting down thousands of jobs and giving out corporate-y reasons for showing their employees the door.

Corporate America has been looking to become leaner since at least mid-2022 after it became clear that its expectations for growth — fueled by the now defunct COVID-19 pandemic — were beginning to falter. So of course the first ones to go out were the thousands of employees that CEOs hired because they thought they could keep riding the euphoria of good business on the internet.

But what the internet giveth, it also taketh away. And so has been the case with tech companies, who are now looking to course correct by canning their workers.

Microsoft was the first big name to announce the layoffs this past week, noting that it would be letting go of 10,000 people in order to trim costs and remain competitive. "These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts," CEO Satya Nadella said in a note to employees, referring to change in customer demand in the cloud business, which, for years, has been the crown jewel of the company but has fallen prey to the inflationary pressure that businesses are currently experiencing.

Even though Microsoft is going to take a $1.2 billion charge because of the severance and other benefits it has to pay employees leaving the company, the job cuts will (presumably) free up cash in the long term for the Windows maker's current obsession: artificial intelligence.

Oh yes, Microsoft is betting hard on AI,  going as far as to tout their inclusion in its products with the help of a deepening partnership with OpenAI, the creator of ChatGPT — an AI chatbot that has the internet incensed ever since it became public. Microsoft swooped in early with OpenAI, making an initial investment in 2019 and then in 2021, but with ChatGPT's most recent rocket success, the company is now funneling even more money in the startup (some media outlets suggest up to $10 billion), and facing head on its competitors Google-parent Alphabet and Amazon, both of whom have also been course correcting in the year of our lord, 2023.

In fact, Alphabet was the second tech titan this past week to note that it will be cutting jobs, surpassing even Microsoft's numbers. The creator of Google, and arguably the only reason why "SEO Specialists" are a thing, said it would be saying goodbye to 12,000 employees. "As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities," CEO Sundar Pichai said in a note to employees. Unfortunately, even 19 years of service didn’t save this loyal Google Engineer from the chopping block.

Yeah...they're searching for new jobs, Pichai.

Not to be snubbed by Microsoft, Pichai also noted a focus on AI moving forward. "We have a substantial opportunity in front of us with AI across our products and are prepared to approach it boldly and responsibly." According to some media reports, the company is preparing for a major AI launch later this year. Whether such a launch will rival OpenAI's offerings is yet to be seen.

Meanwhile, the cumulative effect of all these job cuts have been that the numbers of layoffs in the tech sector have peaked since 2002. According to outplacement firm Challenger, Gray & Christmas, tech companies eliminated 97,000 jobs in 2022 alone, the most since the dot-com crash of 2002 when the industry shed 131,000 jobs, Reuters reported. If the trend continues, 2023 might end up becoming one of the messiest since then.

Google ranked #7 in this week's Tech Company Rankings, followed by Amazon at #57 and Microsoft at #64.

Even Media Companies Are Not Immune 🎵

If you thought that was the end of the layoffs news, we're sorry to tell you that there's still more. Spotify, universally one of the worst things to happen to artists, is also going to be letting go of hundreds of people.

The music streaming service (and home to sometimes conspiracy theorist Joe Rogan), announced a reorganization that will see it let go of 6% of its workforce for the same reasons echoed by other tech CEOs: growth targets that simply aren't panning out because COVID-19 is virtually over.

CEO Daniel Ek also said a reshuffle in the senior leadership, announced alongside the layoffs, will let him "get back to the part where I do my best work—spending more time working on the future of Spotify." We hope that the future does not involve further screwing over artists.

Meanwhile, Wikipedia co-founder Jimmy Wales' for-profit spinoff Fandom also announced layoffs at video gaming publication behemoths Giant Bomb and GameSpot, Kotaku reported.

FTX Comes Clean Over Crypto Hack 🖥️

And so it happened. FTX, once the second-largest crypto exchange in the U.S., has detailed the extent of a crypto hack it reported at the time it was going bankrupt. According to Reuters, the crypto exchange pegged the value of the stolen crypto at $415 million.

What's interesting about all of this is that, so far, nobody has batted an eye about the hack, or at least not as much as we thought everyone would. It feels like the stealing of crypto and related funds via a hack is the least of anyone's problems, given the colossal f*ck up that was FTX.

In Other News.. 📰

  • Cloudflare CEO Matthew Prince thinks generative AI — such as ChatGPT, but also others like DALL-E — are good enough to be considered junior programmers in their own right.
  • In further good news for HODL gang: Bitcoin briefly crossed the $23k mark and investors are said to remain bullish.
  • "Just because I tweet something does not mean people believe it or will act accordingly." Actual words spoken by Elon Musk recently.
  • Netflix co-founder and co-CEO Reed Hastings is stepping away from CEO duties at the streaming giant.

And that's a wrap! There's still time for you to tell us about your 2022 and gain some internet cred, and if you're one of the thousands impacted by the ongoing layoff decisions in the tech industry, you may want to share your story.

See y'all next week. PEACE! ☮️