Tech jobs shake-up echoes post-Covid cuts, but with AI twist

The shake up in tech jobs, it seems, is not yet done.

Last week, Bloomberg News reported how Microsoft was preparing to axe thousands of jobs globally early next month, citing unnamed sources. That leaves staff facing a nervous few days as they wait to find out exactly how and where these cuts will happen.

It follows previous cuts announced by the company this year. But Microsoft is not the only one.

A recent report from Rational FX found more than 90,000 job losses have been announced in the tech sector globally since the start of this year.

‘The mask is off in tech. You’re getting fired if you speak out’

Bringing up baby: the tech you need and the stuff you don’t

Microsoft Surface Laptop 13-inch review: AI-optimised laptop makes some sacrifices

In April, it emerged Intel was planning to cut up to 20 per cent of its global workforce. Meta, Amazon and Panasonic have also said they would trim jobs. The numbers keep mounting.

It is an echo of the unsettling period post-pandemic, when tech firms realised they had over-extended themselves for the new economic reality. Back then it seemed like barely a week or so would go by before some company announced it was cutting swathes of its workforce.

Is there worse to come? It depends on who you believe.

In a Bloomberg interview recently, Google chief executive Sundar Pichai dismissed talk that artificial intelligence (AI) could eventually cut the company’s workforce by up to half, saying instead he expected the technology to become an accelerator.

But even he declined to look too far ahead into the future, settling instead for a prediction of growth into next year,

Perhaps it depends on the job you are doing. Anthropic’s chief executive Dario Amodei believes that within five years half of entry-level white-collar jobs could be wiped out by AI, a prediction that could see 20 per cent of people unemployed.

There was similar from Amazon chief executive Andy Jassy, although he was a bit more explicit in how he sees this AI boom panning out.

In a recent memo, he told employees that more AI would eventually mean fewer corporate staff at Amazon. Generative AI and agents would change how work is done at Amazon as the company introduced more of the technology. They would need fewer staff to do some of the jobs while creating other jobs in other areas.

None of this is surprising. AI should change how Amazon works and it should make some tasks more efficient. If not, it has invested significant amounts of time, energy and cash into a waste of its time.

But this time, Jassy was saying the quiet part out loud. “It’s hard to know exactly where this nets out over time, but in the next few years we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company,” he wrote.

There was no real detail around how he expects these jobs will be cut. Will Amazon offer a voluntary severance programme or simply tell people their time at the ecommerce giant is up? Perhaps it will rely on natural attrition, the catch-all term that covers people leaving the company for a variety of reasons from “better job elsewhere” to “working conditions changed beyond recognition”.

The latter, also known as quiet firing, is effective in reducing staff numbers without having to formally announce job cuts that shake employee confidence and make everyone involved look bad.

So while we all concentrate on the lay-offs that are publicly announced, it is likely that the number of tech job losses is actually more than the companies are letting on.

Amazon has already been accused of trying to cut jobs by stealth. Last year, it told staff they would need to return to the office five days a week from January, which put some workers who had moved during the hybrid working phase in an awkward position.

It is not the only one to implement stricter rules on hybrid working. Google reportedly told some remote workers last month that they needed to attend the office at least three days a week or face losing their job.

Various tech companies have implemented some form of office work mandate in the past year. Salesforce requires staff to attend four days a week in person; Dell has asked staff living near an office to return five days a week, but has stopped short of forcing people who live long distances away to do so.

In the meantime, Amazon can provide convenient cover for its peers, who can now make some less severe changes, safe in the knowledge that while it may not look great, at least they aren’t going to the same extremes.

When it comes to AI-related job changes, Jassy may mean everything he has said. Or it might be a way to signal to shareholders that there will be a pay off from the technology if they just hold the line.

The same goes for staff too. Jassy encouraged Amazon’s employees to “be curious” about AI and learn how to make it work for them.

“Those who embrace this change, become conversant in AI, help us build and improve our AI capabilities internally and deliver for customers will be well-positioned to have high impact and help us reinvent the company,” he wrote.

Some staff may well be considering if that high impact and reinvention could eventually mean they are surplus to requirements.