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Silicon Valley giants' business has rebounded, but it continues to cut small-scale layoffs and non-core sectors.

2024-04-23 Update From: SLTechnology News&Howtos shulou NAV: SLTechnology News&Howtos > IT Information >

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Shulou(Shulou.com)12/24 Report--

On November 30th, the technology industry is gradually coming out of the doldrums, and Silicon Valley has learned a lesson: how to do more with less money.

Although the business and share prices of tech giants such as Amazon, Google, Microsoft and Meta have rebounded strongly, Tuyuan Pixabay is still making small layoffs in order to control costs, ranging from dozens to hundreds of employees at a time.

These layoffs are much smaller than the massive layoffs at the end of 2022 and the beginning of this year. Tens of thousands of people were out of work at that time. But this phenomenon indicates that the technology industry has entered a new era, in which companies pay more attention to efficiency and operate more similar to those that emphasize shareholder value and healthy profit margins.

"We need to re-examine costs, business lines and future investment directions." "frequent small layoffs will be the new normal," said Adam Ward, a founding partner at Growth by DesignTalent.

ChatGPT, a humanoid chat robot launched at the end of last year, has become a bright spot in the industry. Despite the challenges and regulatory requirements surrounding the technology, some top technology companies have begun to make it a priority.

Ward, a former hiring director at Facebook and Pinterest, says the company is redirecting resources from non-core businesses to projects such as artificial intelligence, rather than adding new employees.

Amazon just laid off hundreds of employees from its Alexa division this month in an effort to maximize the company's resources focused on generative artificial intelligence, according to internal memos. Amazon has also made small layoffs in its gaming and music divisions in recent weeks.

"We have added a lot of staff over the past few years," said Brad Glasser, an Amazon spokesman. "now we are adjusting this growth to ensure that the company operates as efficiently as possible."

Meta, the parent company of Facebook, recently reported its highest quarterly revenue in more than a decade. A few weeks later, the company laid off 20 employees. CEO Mark Zuckerberg (Mark Zuckerberg) said on the earnings call that the company will continue to improve operational efficiency, which not only creates a more disciplined and streamlined culture, but also provides stability for the company to achieve long-term planning in a volatile world.

Alphabet, Google's parent company, recently announced its strongest quarterly growth in more than a year, but in recent weeks it has cut jobs in at least six different divisions, from news to Waymo self-driving cars. Several teams argue that they are moving employees to areas such as artificial intelligence. In most cases, employees have the opportunity to reapply for positions within the company, in contrast to the situation earlier this year.

Meanwhile, Google teams are seeking approval from Ruth Porat, chief financial officer, to develop plans for 2024 spending, according to people familiar with the matter. Borat has been pushing to cut company costs.

"over the past year or so, we have been strengthening our core business and actively moving the team to the most critical areas," said Chris Pappas, a Google spokesman.

Erin Brewer, chief financial officer of ride-hailing company Lyft, said in an interview that the company's results in the most recent quarter exceeded Wall Street expectations. Even after laying off thousands of jobs last year, the company will still be "very self-disciplined" to control costs.

Microsoft announced in October that its sales growth accelerated in the first quarter with the popularity of artificial intelligence and the growing demand for cloud computing services. Earlier this month, Microsoft also laid off about 300 employees at its professional social networking site LinkedIn.

Karena Man, a senior partner at consulting firm Korn Ferry, says many large technology companies now allocate budgets to department heads on a quarterly rather than an annual basis. 'The industry traditionally doesn't like the word budget, and it's never been part of corporate culture, 'she says.

Mann also said that continued cost control and efficiency measures have led to an increase in demand for part-time or project-based positions rather than full-time employees. More and more companies are using artificial intelligence to support hiring decisions, such as determining which people and skills can be adjusted internally.

While salaries for technology workers remain stable, Mr Mann points out that companies are no longer as willing to negotiate pay with job seekers as they were in 2021, when they did whatever it takes to attract talent.

The growth brought about by the epidemic and low interest rates at that time prompted companies to recruit and expand on a large scale. But as borrowing costs rise, Mann believes that even if interest rates fall slightly, that trend is unlikely to be reversed because investors demand stricter regulation.

"everyone is repositioning and trying to do more with fewer resources," said Parthi Loganathan, founder of Letterdrop. Letterdrop is a start-up funded by Ycombinator, a Silicon Valley startup incubator that provides marketing software for technology companies. The chief marketing officers who work with Loganassan now have fewer resources, but they need to achieve more ambitious goals.

Mr Loganassan says it is increasingly difficult for start-ups to attract investors through growth strategies at all costs. "there have been a lot of frenzied trends in 2021, and we are now accepting it," he said. People are asking, 'can I lay off staff? can I use artificial intelligence to do some work in the future?' "

In October, the unemployment rate in the technology industry was 2.1%, still lower than the 3.9% in the United States. But hiring in the technology industry has been falling every month since March, according to an analysis by the computer Industry Association (CompTIA).

According to the 2024 US Employment and recruitment Trends report, published by job recruitment website Indeed, the number of software development jobs recruited is more than 25 per cent lower than it was before the outbreak. However, there has been a surge in recruitment messages involving generative artificial intelligence.

"there is no sign that there will be a sudden increase in hiring," said Nick Bunker, head of North American economic research at Indeed. "the hiring environment is still very depressed."

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