AI Rises Amid Layoffs For Tech Giants

CEOs from Google, Microsoft, and Meta recently announced that they were shifting their priorities-and funding-towards the advancement of artificial intelligence.

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“Difficult changes.” “Challenging time.” “Tough choices.”

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A number of big tech companies have announced layoffs in recent months as well as held earnings calls, which have all shared these familiar buzzwords in common, but they have also all had one thing in common: AI advancement is the future, and we should focus more resources and funding towards machine learning projects as a result.

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There have been 270+ tech companies that have reportedly laid off more than 86,000 employees so far this year. This includes headcount reductions of about 12,000 at Alphabet, 10,000 at Microsoft, and 8,000 at Amazon. Meta announced in November that it was going to lay off 11,000 employees in the coming months. In keeping with the industry tracker Layoffs.fyi, these announcements follow nearly 160,000 layoffs of technology workers reported by the company in 2022.

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Three of the biggest technology companies in the world, Google, Microsoft, and Meta, have said that, in part, they are trying to elevate their in-house artificial intelligence projects as a result of the current period of retrenchment. According to Reuters, tech executives used the terms AI, generative AI, and machine learning "two to six times as often," in this quarter's tech earnings calls compared to the previous quarter, according to a study of three earnings calls.

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This aims at potentially giving them a better position for competing in a market where, according to Pitchbook data, generative AI, a sector that raised $1.4 billion in funding last year, has gained widespread interest and has been adopted across a wide range of industries. A UBS study recently reported that OpenAI's ChatGPT has become the fastest-growing consumer app ever recorded, netting 100 million monthly active users within just two months of its launch.

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Tech Town's Talk

Pichai, the CEO of Alphabet, the parent company of Google, wrote in a blog post published in January that the company has a "substantial opportunity" in artificial intelligence, and that it is changing priorities to take full advantage of it.

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During Google's Q4 earnings report last Thursday, technology was one of the biggest themes with the company announcing that DeepMind, its AI subsidiary, would be moved out from under its Other Bets umbrella and put back under its own Google branding. Additionally, Piai stated on the call that Google would add AI search capabilities to its search engine “very soon,” which seems to refer to reports that Google has tested ChatGPT-like chatbots and question-and-answer search pages based on its LaMDA language generation model that run on top of ChatGPT.

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Microsoft's CEO, Satya Nadella, also mentioned the advancement of artificial intelligence in the company's layoff announcement, saying that the technology is transforming computing into the next major wave, as Microsoft uses artificial intelligence models to create a "new computing platform" in order to drive the next major wave. As Microsoft has slashed jobs in some areas, it is expected to continue hiring in key strategic areas like artificial intelligence, even as it cuts roles in some areas.

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As Nadella said on Microsoft's earnings conference call, "we fundamentally believe that AI is going to be the next big platform wave and that it will be strong," Microsoft's CEO said. It is also our belief that a lot of the enterprise value is created by simply being able to catch these waves and then having those waves impact every aspect of our tech stack as well as creating new solutions and opportunities that enhance the enterprise."

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According to Mark Zuckerberg, Meta's November announcement showcased a similar message, stating that the company would focus its funds and resources on "high-priority growth areas," such as the AI discovery engine, which is expected to be launched in the coming months. According to Trade Algo, the company has also improved its ad performance by optimizing its ad-targeting tech across Facebook and Instagram to make more accurate projections with fewer data points as a result of its AI push.

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The CEO of Meta, Mark Zuckerberg, called last week's earnings call to highlight the company's AI and recommendation algorithms, including Reels' AI, rather than concentrating on the company's metaverse products.

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“In our AI-driven algorithm, we are recommending content that we feel is relevant to you based on the people and accounts you follow. Facebook and Instagram are doing this across all kinds of content formats, not only around people and accounts you follow,” Zuckerberg said.

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Meta, Google, and Amazon all introduced generative-AI tools in the last year for video or animations. In addition, Microsoft announced recently that it would expand its partnership with OpenAI, the creator of the GPT-3 and ChatGPT generative AI tools, with GPT-4 reportedly on the way. OpenAI's text tools are also being considered for inclusion in Microsoft Office products, including Word, Outlook, and PowerPoint, in the near future.

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Job openings in the field of artificial intelligence (AI) have remained more resilient than in the overall tech field as companies are pushing into AI. It has been reported that ZipRecruiter data was shared with Tech Brew, which shows that the number of tech jobs posted in January grew by just over 2% as compared to February 2020 - in comparison, postings for AI jobs grew by 6.3%.