Recent months have seen major layoffs at some of the world’s biggest tech companies, resulting in a collective loss of over 150,000 jobs. Although the companies have cited various reasons for these layoffs, such as cost-cutting due to the slowing global economy, it’s unlikely to be the only reason. For instance, Microsoft has invested $10 billion in OpenAI, the creators of the viral app ChatGPT, despite laying off around 10,000 employees. The investment suggests that there may be a strategic business reason behind the layoffs. Similarly, Google’s parent company, Alphabet, announced a global headcount reduction of 12,000, which amounts to a 6% cut. CEO Sundar Pichai has previously hailed AI as the most transformational technology of all time, and the layoffs are intended to “direct our talent

and capital to our highest priorities.” Reports suggest that Google is working on its own AI-powered solution to compete with ChatGPT, indicating the layoffs may be part of the company’s larger AI strategy.

Biggest tech giants, including Meta, Alphabet, Amazon, and Microsoft, have slashed 50,000 jobs while Elon Musk, Twitter’s incoming CEO, reportedly fired half of its employees at the end of last year. The US has been hit the hardest with 80% of workers affected. But what triggered these massive job cuts? 365 Data Science delved into the figures to conduct their analysis and uncover the real reasons behind these layoffs.

It’s no secret that tech companies ramped up hiring during the COVID-19 pandemic, thanks to their impressive revenues. This led to intense competition for top talent and sky-high salaries, with many companies offering lavish perks. So, it’s not surprising that the median tenure of recently laid-off employees is around two years. This could indicate that these layoffs are a reversal of the hiring policies implemented during the pandemic.

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The Impact of Layoffs on HR Roles: Analysis of Big Tech Companies

It is worth noting that out of all the layoffs, the most affected job functions were those in HR, which accounted for 28% of the total number of job cuts. Two primary reasons could explain this trend. Firstly, companies reduce their recruitment activities during layoffs, resulting in a decreased demand for HR professionals.

Secondly, HR is an area where automation is taking over some job functions. Automated platforms now exist to carry out routine tasks related to hiring, such as conducting background checks, verifying identities, and carrying out health and safety assessments. In recent years, companies like Amazon have even used AI to identify underperforming staff and initiate terminations.

Moreover, the types of roles that were impacted varied across the different companies. While Microsoft and Meta experienced significant cuts in HR and talent sourcing functions, software engineers took the brunt of the layoffs at Google and Twitter.

According to data collected by 365 Data Science, a concerning majority of staff who were let go (56 percent) were female. This is alarming given the tech industry’s efforts to address gender imbalance, particularly in technical and engineering roles. This statistic could deter potential female hires as they face not only a pay gap and limited opportunities for progression but also a higher likelihood of losing their jobs.

Another worrying statistic from the report is that only 10 percent of those laid off have updated their LinkedIn profiles with a new job. While it’s too soon to determine if this will result in long-term unemployment, it will be interesting to see if skilled tech workers can easily transition between jobs in the coming months. Many may choose self-employment or the freelance gig economy instead.

The reason for the layoffs could be a combination of tech giants expanding too quickly and automation replacing human workers. While none of the companies have explicitly cited automation as a reason for the job cuts, the roles affected suggest it could be a contributing factor.

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