Microsoft and Alphabet became the latest companies to announce major job cuts last week amid a wave of layoffs that is sweeping across the tech sector. While Microsoft will reduce its global workforce by 10,000 people, Google parent Alphabet will cut 12,000 jobs in what is the largest layoff in the company’s history.
“We’re living through times of significant change,” Microsoft CEO Satya Nadella said in a memo to employees, mentioning a slowdown in digital spending, global recession fears and “the next major wave of computing” thanks to advances in AI. To address these changes, Nadella wrote, Microsoft would align its cost structure with its revenue and customer demand, while continuing to invest in strategic areas for the future. “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,” Nadella wrote, possibly aware of the fact that Microsoft could have handled the last platform shift (i.e. the shift to mobile) better.
In a similar message to Google staff, Sundar Pichai addressed the large-scale layoffs saying that during the last two years of dramatic growth, his company hired for a “different economic reality than the one we face today.” Interestingly, like Nadella, Pichai also identified the shift to AI as a catalyst for future performance. Thanks to his company’s early investments in the field, he wrote, “Google’s products are better than ever. 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 Layoffs.fyi, a site that has been tracking tech layoffs since the beginning of the Covid-19 pandemic, both Microsoft’s and Alphabet’s latest job cuts are among the most significant ones of the past three years. Amazon, Alphabet, Microsoft and Meta alone have laid off more than 50,000 workers in the last three months and experts are expecting the widespread job cuts to continue throughout 2023.
