Tech titans maintain job cuts in 2024 amid AI investment surge

The "Year of Efficiency" in Big Tech may be over, but signs indicate that the industry's major players, Google and Amazon, are set to continue job cuts in 2024 as they intensify their investments in generative artificial intelligence (AI).

This is based on a Reuters report.

Analysts and industry experts anticipate that this year's layoffs will be smaller and more targeted, with companies racing to advance in the AI sector likely to make strategic moves to offset substantial spending on the technology.

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Alphabet, Google's parent company, recently laid off around a thousand employees across various divisions, emphasising its commitment to invest in "biggest priorities."

The cuts impacted divisions such as the voice assistant unit, Pixel, Fitbit, and even the advertising business.

Amazon, too, laid off several hundred employees, focusing on its streaming and studio operations, including job cuts in its Twitch live-streaming platform and Audible audiobook unit. In total, over 7,500 tech employees have faced job cuts in January alone.

While the total size of layoffs is expected to be smaller compared to the significant cuts seen last year, Google and Amazon are aggressively investing in AI initiatives.

Google unveiled its long-awaited Gemini model last month, aiming to close the gap with Microsoft in the AI race. Amazon is developing a model codenamed "Olympus" to compete with OpenAI's GPT-4 model.

The companies are adjusting their hiring priorities, offering substantial salaries for AI roles, reflecting the industry's shift towards prioritizing AI capabilities.

The tech sector witnessed a substantial loss of 168,032 jobs in 2023, representing the highest number of layoffs across industries.

Tens of thousands of job cuts at tech giants, including Alphabet, Microsoft, Amazon, and Meta, marked 2023 as the "Year of Efficiency," as stated by Meta CEO Mark Zuckerberg.

Despite the AI-driven dynamism, experts believe that the tech industry's hiring priorities are changing, with a focus on AI roles and a departure from the massive layoffs seen during the pandemic.

With AI becoming a driving force, some tech firms are offering lucrative salaries for AI roles.

Match's Hinge dating app sought a vice president of AI with a base salary of up to $398,000 a year, while Amazon offered a top salary of $340,300 for a senior manager of applied science and genAI.

The increased spending on AI is raising investor expectations, although the returns for most companies may take longer to materialise, with only Microsoft and Nvidia emerging as significant winners in the current AI boom.

(With inputs from Reuters)