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  • The tech sector shed more than 386,000 jobs in 2022

  • 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