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Tech Stocks Hit New Records as Tech Layoffs Rise Amid AI Hiring Sprees (cnbc.com) 61

Posted by EditorDavid from the rise-of-the-machines dept.
An anonymous Slashdot reader shared this report from CNBC: The S&P 500 is trading at a record and the Nasdaq is at its highest in two years. Alphabet shares reached a new pinnacle on Thursday, as did Meta and Microsoft, which ran past $3 trillion in market cap.

Don't tell that to the bosses.

While Wall Street cheers on Silicon Valley, tech companies are downsizing at an accelerating clip. So far in January, some 23,670 workers have been laid off from 85 tech companies, according to the website Layoffs.fyi. That's the most since March, when almost 38,000 people in the industry were shown the exits. Activity picked up this week with SAP announcing job changes or layoffs for 8,000 employees and Microsoft cutting 1,900 positions in its gaming division. Additionally, high-valued fintech startup Brex laid off 20% of its staff and eBay slashed 1,000 jobs, or 9% of its full-time workforce... Earlier in the month, Google confirmed that it cut several hundred jobs across the company, and Amazon has eliminated hundreds of positions spanning its Prime Video, MGM Studios, Twitch and Audible divisions. Unity said it's cutting about 25% of its staff, and Discord, which offers a popular messaging service used by gamers, is shedding 17% of its workforce...

Investors lauded the cost-cutting measures that companies put in place last year in response to rising inflation, interest rates hikes, recession concerns and a brutal market downturn in 2022. Even with an improving economic outlook, the thriftiness continues. Layoffs peaked in January of last year, when 277 technology companies cut almost 90,000 jobs, as the tech industry was forced to reckon with the end of a more than decade-long bull market. Most of the rightsizing efforts took place in the first quarter of 2023, and the number of cuts proceeded to decline each month through September, before ticking up toward the end of the year.

One explanation for the January surge as companies budget for the year ahead: They've learned they can do more with less... Nigel Vaz, CEO of consulting firm Publicis Sapient, told CNBC that some companies are probably looking at the boon that Meta and Salesforce got after their hefty cost-cutting measures last year... At the large publicly traded companies, there's an "intense focus" on profitability, margins and cost cutting, said Tim Herbert, chief research officer at CompTIA, which tracks trends across the tech sector.
CNBC emphasizes that layoff numbers are much lower than last year, according to the CEO of the company that owns the tech-recruiting site Dice — and that the layoffs aren't limited to the tech industry. But the article also argues that "AI demand is so great that some tech companies are cutting headcount in parts of the business to invest more heavily in developing AI products." (SAP specifically said its restructuring aimed to boost "focus on key strategic growth areas, in particular Business AI.")

And elsewhere CNBC writes that "As tech firms prioritize investments into artificial intelligence and go on a hiring spree, other segments are likely to see layoffs continue into 2024, according to industry experts."
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Tech Stocks Hit New Records as Tech Layoffs Rise Amid AI Hiring Sprees More

Tech Stocks Hit New Records as Tech Layoffs Rise Amid AI Hiring Sprees

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  • There never was a "shortage" of workers. (Score:5, Insightful)

    by RedK ( 112790 ) on Saturday January 27, 2024 @06:10PM (#64193212)

    But people screaming about it made companies rush to hire more people than they needed. Now that companies are realising, they are trimming back the fat and going back to normal.

    People who really thought there was a shortage of workers that magically spawned out of nowhere just had wishful thinking as the Return to Office mandates were dropping and they really wanted to keep on working without pants at home.

    • Re: (Score:2, Offtopic)

      by ArmoredDragon ( 3450605 )

      There's very much a shortage of people that have the right talent, skills, and knowledge. There's an oversupply of people who don't.

      Take for example, if there's a high paying job listing that wants high knowledge of Drupal and a strong DBA background. They don't want somebody who has a lot of IT experience but no experience with either of those. Take me for example, I have a strong background in network, software, and security engineering. Which is nice and all, but that's not what they need. My employer is

      • Labor is subject to the same rules of supply and demand as any other commodity. Some skills are in high demand because there's not as many people who have them. Thing is, people who don't know what a loop is need to make a decent living too. If they all went back to school, that'd just create an oversupply in the labor market, not magically grant all of those people good paying jobs out of thin air.

        The situation with HVAC jobs in Florida is a great example. The pay sucks because there are simply too many

        • Thing is, people who don't know what a loop is need to make a decent living too.

          They're not going to get there by applying for software engineering jobs.

          • The point is companies until last year and in the late 1990s were willing to train or move people into these positions due to demand and lack of supply within budget constraints.

            Now the market is switching back to normal as the demand was fueled by bailout and 0% interest loans which bloated the share prices of these faang aka .com companies so they overhired.

            Now since you can earn 6.5% interest in a savings account the share price needs to grow more than that a year and the cost to pay the lines of credit

            • The point is companies until last year and in the late 1990s were willing to train or move people into these positions due to demand and lack of supply within budget constraints.

              That never really stopped. I remember the 90s quite well. Even at the time, the doomers were saying the same or similar shit. Some things never change.

              For what is worth, my employer will hire people if they seem like they have a good template. That's pretty much what happened to me. I was hired into my current job based on what they felt I could do as a software engineer. Despite having all of three years of experience, and only a year that I could actually document based on job title, they started me out a

              • lol, 3 years experience and 265k/yr, you were a diversity hire weren't you?
                • dog whistle

                • Yes, I checked the box labeled "transgender Muslim with ass burgers". And I would have gotten away with it too if it weren't for you meddling kids!

                  I guess technically I'd qualify for ...something...? given I'm a veteran, though I doubt anybody was even aware of that until after I onboarded because the field for that is marked "declined to identify". Or I guess if being 40 at the time of hire counts for anything then maybe, though almost all of my coworkers are older than me and were older than me when they

          • Doesn't keep them from trying.

            Even if they think that TCP is the Chinese secret service. It's just typing stuff on a keyboard and looking at a screen, how hard can it be?

        • Even if they all go back to school we won't end up with an oversupply of highly qualified people.

          People are not fungible. You can't just retool them, they have different abilities and different skill sets.

      • Re: (Score:3)

        by gweihir ( 88907 )

        Well, yes. There is actually an oversupply of people that have very few skills and are often not really good at them in addition. Obviously, people with good skills in in-demand areas can and will do cherry-picking now.

      • Yes, if you're trying to hire purple squirrels [wikipedia.org], you're going to have a bad time. Or worse, there's invariably job ads asking for X years of experience in a technology Y years old, Y X. This ain't piloting, there's no type certificates, you don't always need to hire someone who has done exactly what you need done.

      • network, software, and security engineering

        Hello, mr.security guard that talks to others and uses a program to clock in to work. I'm a line cook at applebee's. They call me the food engineer. Mad props to your cute job title.

        My employer is hiring a TON of people for IT, but for each one of them we hire, there's probably 20k+ applications that we pass on. And we STILL have a lot of positions that we simply can't fill. We've had people make it pretty far into the interview process to find out things like, for example, a guy who wants a senior level development job doesn't even know what a loop is. People like him waste our time so we have less time to find the people that we actually need.

        Cool story, bro. Too bad it doesn't make any sense at all.

    • There was a shortage.

      The cause of this and inflation are simply. An expansion of money supply. Bad government policies.

      If a company needs to grow at all costs and have awesome liquity ratios (which means assets like money over debt + costs) the shareprice goes up. When this is low the share price goes down.

      When borrowing costs and government bailouts from the Covid in 2020 threw out free money all the .com's took a shit ton of debt at .5% interest or something stupid low. If not hedge funds in London and Wa

  • Here's what's coming next (Score:5, Interesting)

    by Rosco P. Coltrane ( 209368 ) on Saturday January 27, 2024 @06:17PM (#64193224)

    So, predictably, corporate head honchos right and left are having a boner at the thought of replacing expensive employees with cheap mechanical slaves and they've busy doing exactly that. No surprise there.

    Here are my predictions for what's coming next:

    - Products and services enshittify across the board, because AI isn't on par with humans yet - even average humans. It's too soon to deploy them, but shhh... don't tell that to greedy shareholders and CEOs...

    - As unemployment grows, people don't have the money to buy said products and services anyway and the economy starts shrinking.

    - Wall Street finally realizes that shit is about to hit the fan, the bubble burst, and we're all in for another 10 years of hard recession. Only this one is likely to last a lot longer, because the advent of AI will make it systemic.

    Enjoy the good times while they last people. They'll be over soon, thanks to the capitalists' insistance on frantically cutting costs even if it means destroying society and their own customer base in the process. You can't fix stupid, but stupid is gonna hurt bad this time around.

    • Re:Here's what's coming next (Score:5, Insightful)

      by quonset ( 4839537 ) on Saturday January 27, 2024 @06:23PM (#64193236)

      Oh please. You know very well the taxpayers will be forced to bail out these companies. Can't let their incompetence be realized. There's always enough socialist money to protect businesses.

      • Oh please. You know very well the taxpayers will be forced to bail out these companies. Can't let their incompetence be realized. There's always enough socialist money to protect businesses.

        And when the economy tanks and we're on the verge of, or actually in, a depression - where will the money come from? Then the emperor's clothes - materialized via the magic of printed 'money' - will be revealed as the mass hallucination they really are.

        • where will the money come from?

          They will print fucking mountains of cash without hesitation. If it looks like folks won't take the funny money anymore, they will confiscate silver and gold to shore up confidence (this isn't a theory, it's a playbook from the 1930's). If that doesn't work, they will start confiscating other stuff like land or Bitcoin (whatever happens to be holding it's value at the time and people are buying as a hedge) and tell everyone the people they stole from were the bad-people the ones not suffering like they are.

          • Exactly. The whole "how will we pay for this?" mantra only applies when it benefits peons. When dealing with corporate bailouts, it is not a problem.
          • When FDR followed up in June by abrogating the gold clauses in both private and government contracts, he asked blind Oklahoma Senator Thomas Gore, a fellow Democrat, for his opinion. He famously replied, “Why that’s just plain stealing, isn’t it, Mr. President?” Except it isn't, as they were paid for said gold. It wasn't a big deal, i assume most people didn't still buy stuff with gold. All you had to do was put it away and not tell anyone. FYI, alcohol was illegal during this ti

            • Except it isn't, as they were paid for said gold.

              They were paid $25/oz. Then the government immediately re-valued to $35/oz, stealing the 28.5% gain. That was all part of the plan. Prohibition lasted from 1920 to 1933 and wasn't a huge factor in the Depression, which was still gaining momentum by 1933 and lasted up until 1939. They didn't need to raid people's houses for gold because they made it illegal to own from 1933 until 1974. If you'd been holding gold, you'd have needed to get out or end up holding a financial instrument you couldn't trade for 41

        • I saw comments just like this back in 2001 and 2009 here on slashdot lol.

          If the government is stupid enough to do bank bailouts like in 2020 we will have massive inflation yet again and these companies will over hire and pay people not to work to keep competitors starved of employees and the cycle repeats and cars will then start at 70k and home mortgages will start at 4k a month for starter homes. People will riot if this happens.

          We will have a recession and wages will go back to normal and housing and car

          • People will riot if this happens.

            Will they? Venezuela, Argentina, Turkey etc. have proven that hyperinflation is no threat to the status quo, and the USA is a more advanced police state. Yellen will still be rich and giving the same speeches if Americans are eating rats.

        • If a republican is in office, there is always enough money for the wealthy ruling class.

    • The enshittification has been ongoing since about 1970 for those of us who have been paying attention. And, always for the same reasons, but via different mechanisms and market segments.

    • Market forces could deal with the impact of AI, if we just let them. Let’s say that AI knocks it out of the park and every company can cut costs by 75% and maintain productivity. That means they cut their workforce by 75%, since paying people is basically what companies spend $$$ on. And employment and wages goes way down. Awful, right? Hold on a sec. With 75% less $$$ flowing into peoples pockets, companies are gonna have to cut their prices by almost exactly 75%, or their sales will drop off a clif

      • Re: (Score:2)

        by DarkOx ( 621550 )

        I think in the broadest terms you have it but why you are missing is that these dislocations are not universal.

        The problem is as wages fall NOT everyones wages fall. The problem is as the price of goods fall in-elastic things food and housing - don't. This leaves the displaced group unable to meet basic needs. We say a version of this in the 1930s. I don't think a lot people understood it at the time and don't now but a big part of why 'that time it was different' vs the many many busts the American econo

        • Accurate prediction or not, you've presented a very clear and easily understood comparison between then and now. I find it both interesting and plausible.
          I also find myself hoping it never occurs as presented, because preventive measures are taken.

        • Interesting. You know more history than me. I think there are a few things different now than the 1930s.

          1) Back in the 30s, the government did basically nothing if you were starving. The concept of a national safety net barely existed. It’s one of the few things that socialism got right. Socialism as a form of government is an abject failure, but that line of thinking led to most capitalist countries building mechanisms to keep people from getting that miserable, for damn good reasons. If the AI r

    • Wall Street finally realizes that shit is about to hit the fan, the bubble burst, and we're all in for another 10 years of hard recession. Only this one is likely to last a lot longer, because the advent of AI will make it systemic.

      You guys keep saying this every other decade, though instead of AI it's always something else. And it never pans out either. You guys have been doing this ever since Ludd.

    • Re: (Score:2)

      by jmccue ( 834797 )

      Enjoy the good times while they last people. They'll be over soon

      To me, we are in a race between many items on which will cause the first big problems. Climate Change, AI, Fascism with Climate Change being the elephant in the room. Fun time to be young :(

      To bad my generation and the prior generation were too lazy to pass a better word off to their children like my Grandparents did (they fought and died for better working conditions). We were all warned about some of these things, but were happy to ignore the warnings.

      • To me, we are in a race between many items on which will cause the first big problems. Climate Change, AI, Fascism with Climate Change being the elephant in the room. Fun time to be young :(

        I keep hearing people say there's this big resurgence of fascism, but that just doesn't sound right to me because during the 70s there used to be actual rallies that they'd hold, brown shirts and all. Yet now it's basically unheard of. The closest to that I've seen in my lifetime was actually done by Antifa. Literally marching in formation with actual brown shirts, even carrying weapons, and they were literally threatening and harassing a journalist for filming them. They did this in downtown Phoenix.

        https: [youtube.com]

        • Somehow all the '-ism' labels have been flipped. The ones that actually are of a particular '-ism' accuse others of it. Our society is bananas.
    • So long as they own everything. Unless people get to the point where they're willing to take the stuff away from Wall Street executives and are smart enough to do it without violence then this is all just pissing in the wind.

      But I suspect will happen is that once the baby boomers are too old to vote anymore and you're left with nothing but broke ass younger people we will vote ourselves in a new new deal. It's possible older gen xers will stand in the way but I suspect they're low Church attendance will
    • The reason for the current round of layoffs were the talent-hoarding where these companies hired as many people as they could expecting the worst with covid. So a lot of unqualified people got hired and now the fat needs to be trimmed. To illustrate I saw this post on a relevant board: "Software engineering is an a middle ground right now, you need to be good to get a job". To which I replied "Imagine that" Basically anyone who could breath and spew some IT buzzwords got well paying IT jobs in the past 3

  • When they start announcing they are moving HQs (Score:3, Interesting)

    by dmay34 ( 6770232 ) on Saturday January 27, 2024 @06:36PM (#64193256)

    The layoffs are the first step in disinvestment. When they start announcing they are moving their HQs to Texas, that's the top and it's downhill from there. Moving your HQ to Texas is a declaration that your company is out of ideas and are no longer interested in investing in innovation and so the board is transitioning to lowing taxes and milking the company.

  • It would be interesting to see stats dividing the cuts between those who went back to the office and those who continued to put in a significant portion of their hours working from home. The conspiracy theorist in me suspects that at least part of the motivation of this is to kill WFH.

    Even if it's not a primary motive, ending WFH is likely on a lot of c-suite and bean-counter minds. And those employees who don't get the axe this time around will probably be spooked enough to get their asses back into cubicl

    • Re:Percentages? (Score:5, Informative)

      by quonset ( 4839537 ) on Saturday January 27, 2024 @07:15PM (#64193296)

      It would be interesting to see stats dividing the cuts between those who went back to the office and those who continued to put in a significant portion of their hours working from home. The conspiracy theorist in me suspects that at least part of the motivation of this is to kill WFH.

      You may or may not be right, but remote workers are being fired first [businessinsider.com] over those who work in the office. The reason?

      "When a hiring manager gets news they have to cut 10% of the staff, it's easier to put someone on the list you don't have a close personal relationship with," Andy Challenger, senior vice president at Challenger, Gray & Christmas, an outplacement firm, told The Journal.

      Also, bosses admit they'll fire a remote worker first [yahoo.com] over someone in the office for pretty much the same reason.

  • Don't worry, there's no chance laying off large numbers of competent people who know your industry can come back to bite you. What are they gonna do, form small, fast-moving startups to compete with you, utilizing new and better ideas that you are too entrenched to compete against? Ha, show me even once in the history of the tech industry when a quick, efficient upstart has blown the behemoth dinosaur out of the water. Go back to sleep, tech giants, there's nothing to fear on the horizon.

  • Um, wait. That's only for people let go from blue collar jobs like coal mining. I guess these poor souls are screwed?

  • Yes, that was sarcasm.

  • Tech Stocks Hit New Records as Tech Layoffs Rise Amid AI Hiring Sprees

    Brace for impact! I forecast the shock will be much worse than the 2000 bubble burst! /s

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