and the first half of 2023. And that number is

climbing.

Google today joined a growing list of tech

giants scaling back, adding to the tens of

thousands of workers in the industry who find

themselves unemployed.

It is Amazon doing another round of layoffs.

Mark Zuckerberg's year of efficiency back in focus

this morning after another round of sweeping

layoffs and job cuts.

The email that was sent out in the morning to

everyone in the company basically saying,

'Unfortunately, your role is impacted.' And that's

how I found out. And then they pretty much shut

everything off at the end of the day.

I was on the committee that was hiring new

college grads.

It was like thousands and thousands of applications

for maybe like 10 or 15 spots.

But I thought if we're still hiring new college

grads, clearly the company is fine.

Why would we hire new grads if the company were

going to do layoffs?

Known for its boom and bust cycles, tech has seen

its fair share of layoffs in recent decades.

More recently, the industry has faced

headwinds related to the crypto crash and the

failure of the Silicon Valley Bank.

Job postings for software development positions,

they're down closer to 60% year over year, and

they are actually below their pre-pandemic levels.

So we've seen a much starker pullback in hiring

for software development, which is a lot of tech

jobs.

But while layoffs have tax retrenched workers, a

booming artificial intelligence market is

giving the industry a renewed sense of optimism.

I have been in San Francisco for almost 12

years now, and I have never felt this kind of

energy. And I was here for the mobile boom.

I worked at Uber, which I think was the one company

representing that mobile explosion. And I can tell

you it was nothing like this. Every cafe, every

restaurant, every conversation that you

overhear in the street, half of the time it's

ChatGPT, it's AI, it's the latest company that is

being funded. It's accelerating.

Generative AI startup deals announced or

finalized in the first quarter of 2023 totaled

more than $12 billion, compared with about $4.5

billion invested in the space in 2022.

Amazon, Alphabet and Microsoft have also made

massive investments.

The U.S. tech industry accounts for 10% of the

nation's GDP.

It employs roughly 12 million people who work in

more than half a million companies. Those

businesses are concentrated in a handful

of coastal areas, including San Jose,

Washington, D.C., San Francisco, Boston and New

York City. So how have layoffs impacted tech

workers, and what will the AI boom mean for their

future?

The pandemic and ensuing lockdowns brought the U.S.

economy into a tailspin in March 2020, forcing

businesses to shut their doors.

By May, 23 million Americans lost their jobs.

The unemployment rate surged to 14.7%, the

highest since the Great Depression. But tech

companies face a different climate.

Remote work and cloud computing meant more

people were pivoting towards online services,

boosting revenue.

Spurred on by rosy predictions and lower

interest rates, Microsoft, Amazon,

Salesforce, Facebook parent Meta and Google

parent Alphabet went on a hiring spree.

Meta had about 72,000 employees at the end of

2021, more than 60% higher than 2019.

Alphabet had more than 190,000 on staff at the

end of 2022, 59% higher than 2019.

But after years of unstoppable growth, Big

tech's pandemic bubble burst, forcing tech

companies to trim their rosters.

I want to say upfront that I take full responsibility

for this decision.

I'm the founder and CEO.

I'm responsible for the health of our company.

Carl Wheatley, a recruiter for Meta, grew up in the

Bay Area and spent four years working for the

social media giant.

Meta laid off more than 11,000 workers, or about

13% of its workforce in November 2022.

It announced a few months later it was reducing its

headcount by another 10,000 employees.

I was talking to my family about it.

They grew up in the Bay Area. They've been through

multiple layoffs over the past.

I think for our age group, I would say this is

probably one of the, I think, biggest downtrends

for layoffs.

Other companies quickly followed suit.

If you want to think about a company that overbuilt

during the pandemic, I'd say that Amazon is the

number one company that overbuilt.

Where is, where are the cuts?

Amazon announced in January 2023 that 18,000

workers were being laid off. Two months later, it

said an additional 9,000 positions would be

trimmed. That same month, Alphabet cut 12,000 jobs

or about 6% of its workforce.

I thought, 'Holy crap, I've finally made it.

I'm working at probably one of the best companies

in the world and I'm making an amazing salary

and I have longevity.

Like I am good for many, many, many, many years.'

Paul Baker, a video producer in tech, worked

at Google for six years.

We all got this email early in the morning on

January 20th.

It just it just hit me like a ton of bricks.

I actually froze going, 'Wait, is this for real?'

I opened my work laptop and it says, no, access

denied, no passwords are working.

So I had to look at my personal laptop, which had

an email from them stating, 'Hey, you've been

officially terminated.

We're giving you two months notice, but you're

cut off. You're banned from going to any Google

office. You cannot contact anyone, like,

nothing.'

Company leadership was in a far different position.

Alphabet CEO Sundar Pichai's 2022

compensation, for example, was worth $225

million, about 800 times the pay of the median

employee. The company's stock has continued to

climb since the announcement. Other

companies in the space that made cuts to their

workforce include Microsoft, Salesforce and

SAP. While tech layoffs have been painful, the

blow has been cushioned in many cases by generous

severance packages.

Recently laid off, Google employees in the U.S.

received 16 weeks of pay, plus two weeks for every

year of employment.

Salesforce employees received a minimum of

nearly five months of pay.

Stephen Campbell, a software engineer, was

laid off from Airtable, a cloud-based project

management service, in December 2022.

One night I stayed up especially late and woke

up to a bunch of Slack messages saying, 'Are you

safe? Are you okay?' And I thought like, was there

an earthquake in SF?

Like, what's going on?

Obviously I'm safe, I feel fine.

And as I woke up a little more, I thought, oh, no,

like, I know what this is. And so I like opened

up my work laptop and I got a notification saying,

like, 'your access to this laptop will end in 30

minutes.'

With help from a severance package, Campbell

co-founded two new businesses. Revamp AI uses

machine learning and generative AI to get

insights into customer datasets.

His other business hosts in-person events to

discuss the future of generative AI.

The thing about generative AI in San Francisco right

now is that there's similar buzz to crypto,

right? There's all these meetups, which I'm

fortunate to throw some of them.

There's all of this venture investment going

into it. I mean, absurd amounts of money is

getting funneled into generative AI startups.

The difference for me between generative AI and

something like crypto is generative AI is solving

problems for people today, it's delivering

value for people today.

San Francisco has 11 out of 20 of the top AI

companies in the U.S.

by dollars raised.

Collectively, those businesses took in $15.7

billion between 2008 and 2023.

Investments in automation and AI at big tech

companies could be a contributing factor in

recent layoffs, Meta CEO Mark Zuckerberg told

employees prior to its third round of layoffs

that investments in tools like AI would help

engineers write better code faster and automate

workloads. Flo Crivello founded Lindy in 2022.

The company's AI personal assistant helps automate

tasks for workers like drafting emails, sending

calendar invites and taking notes during

meetings.

Something absolutely huge is coming, and I don't

think people have quite realized that yet, that

everything is about to change, especially the

information economy and knowledge workers.

Steve Jobs said that computers were like a

bicycle for the mind.

I think that AI is like a jumbo jet for the mind.

I think it is going to radically change how

people work and go about their lives.

Generative AI could add as much as $2.6 to $4.4

trillion to the global economy annually.

I think counterintuitively it is actually going to

result in a net increase in employment in the tech

industry. It's a basic fact of economics that

when something becomes cheaper, its complement

becomes more valuable.

Tech workers are a complement to AI, AI makes

tech workers a lot more productive, and so when

something becomes a lot more productive and a lot

more valuable, we want more of it, not less.

I don't know if I necessarily would want to

say that I don't regret getting laid off sooner,

but getting laid off was such an overall positive

experience to me.

Really, the only downside to it was the initial

shock that was tough to deal with.

While layoffs are having a big impact on tech

companies, the sector is accustomed to periods of

growth and contraction.

Tech has always been an industry with very high

churn and that actually comes from both sides.

So job seekers have always really valued the

flexibility that they have in order to jump from

tech company to startup to major company to really

grow their career.

And at the same time, tech, because it's often

at the forefront, has been a subject to big

booms and busts.

The bursting of the dot-com bubble two decades

earlier eliminated more than 1 million jobs.

The Great Recession spurred additional cuts.

By 2008, Silicon Valley tech companies employed

17% fewer workers than in 2001.

But there are a few key differences this time

around. Even though two thirds of tech workers are

men, more than half of those laid off in 2022 and

2023 were women.

According to a study analyzing more than 1,100

LinkedIn profiles, the groups most heavily

impacted by layoffs include HR and talent

sourcing, software engineers and marketing

employees. Bianca Brown started with Meta in 2019.

She was laid off from her job as a program manager

in 2023.

I tried to sleep the night before, I couldn't, and

then maybe it was around the 8:00 a.m.

mark I got the email.

My heart kind of dropped.

You know, I took a deep breath and I was like,

okay, you know, this is your new reality, this is

something you have to navigate.

The study also found 48% of laid off employees were

between 30 to 40 years old.

89% were based in the U.S.