Google Joins The Surge Of Tech Layoffs
Buyouts are spreading from Microsoft to Oracle to Google, and the total already tops six figures. If these companies are the canaries in the coal mine, one workforce calculation shows how quickly the damage could reach everyone else.
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Microsoft (NASDAQ: MSFT | MSFT Price Prediction) recently offered buyouts to 60,000 employees. It is unclear what the company will do if fewer than 60,000 employees take it. Earlier this year, Meta’s (NASDAQ: META) CEO Mark Zuckerberg planned to cut 45,000 people, which would have been 60% of the company’s workers. He walked it back. Oracle recently cut 21,000 people, which was about 13% of its staff. Some observers think these cuts are due to the efficiency AI has brought to the software industry. Others think it is because many megatechs have reported cash-flow-negative earnings from building AI data centers.
Regardless of the reason, Google has started layoffs according to a report from Reuters. They are called “voluntary exit packages.” It remains unclear whether they will stay voluntary. One thing is certain: across the biggest tech companies, layoffs and buyouts have topped 100,000 this year. There is little reason to believe, with AI’s growing prowess and the need for capital, that the process has ended or will anytime soon. If AI is as powerful as experts say it will be in a few months, the stream of layoffs could turn into a mighty river.
Again and again, the question is how bad the job slaughter will be because of AI. Tech is an early indication. If the process moves to retail companies, layoffs will jump into the hundreds of thousands. If the financial services industry adopts AI significantly, that is six figures of layoffs, too.
What happens if Alphabet (NASDAQ: GOOG), Microsoft, and Oracle (NASDAQ: ORCL) are the canaries in a coal mine? If so, the US jobless rate could pick up quickly. The US workforce is 163 million people, according to the BLS. If 1.6 million people lose their jobs, the US jobless rate rises 1%. Layoffs could be much higher than 1.6 million. Unemployment moves toward recession levels. The AI jobs tsunami will have begun.
How fast could the US jobless rate increase? It depends on whether the tech layoffs are isolated incidents.
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
