Amid wave of layoffs, some tech giants are elevating AI

Alphabet, Microsoft, and Meta execs said they planned to shift priorities—and funding—toward AI advancement.
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Hannah Minn

· 4 min read

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

Big Tech companies’ recent layoff announcements and earnings calls have had these familiar buzzwords in common, but many of them have also shared an overarching vision: That AI is advancement is the future, and it’s time to shift more focus and funding toward machine learning projects.

So far this year, 270+ tech companies have reportedly laid off more than 86,000 workers, and that includes headcount reductions of about 12,000 at Alphabet, 10,000 at Microsoft, and 8,000 at Amazon. In November, Meta announced it would lay off 11,000 of its staff. These announcements follow nearly 160,000 layoffs of tech workers in 2022, according to industry tracker

Three of the most influential tech companies—Alphabet, Microsoft, and Meta—have said that, in part, they’re using the period of retrenchment to try and elevate their in-house AI projects. This quarters’ tech earnings calls resulted in tech execs using the terms AI, generative AI, and machine learning “two to six times as often as they did in the previous quarter, according to a Reuters analysis.

The aim is to potentially better position themselves to compete in a landscape where generative AI, a sector that raised $1.4 billion last year according to Pitchbook data, has quickly sparked widespread interest and adoption across industries. OpenAI’s ChatGPT recently became the fastest-growing consumer application ever recorded, according to a UBS study, netting ~100 million monthly active users in two months.

Talk of the tech town

Sundar Pichai, CEO of Google and parent Alphabet, wrote in a January blog post that the company has a “substantial opportunity” in AI and is adjusting priorities to fully capture it, building on the company’s early investments in AI.

The technology was a huge focus on the company's Q4 earnings last Thursday, with Google announcing it would move DeepMind, its AI subsidiary, out from under its Other Bets umbrella and back into Google proper. Pichai also said on the call that Google will add AI search features to its search engine “very soon,” seeming to reference reports of Google’s internal tests of ChatGPT-like chatbots and question-and-answer search pages, which run on top of the company’s LaMDA language generation model.

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Satya Nadella, CEO of Microsoft, also shared thoughts about AI advancement in the company’s layoffs announcement, writing that the technology is driving the “next major wave of computing” as Microsoft uses AI models to build a “new computing platform.” And while Microsoft slashed roles in some areas, it “will continue to hire in key strategic areas,” like, potentially, AI.

“We fundamentally believe that the next big platform wave…is going to be AI and be strong,” Nadella said on Microsoft’s earnings call. “We also believe a lot of the enterprise value gets created by just being able to catch these waves and then have those waves impact every part of our tech stack and also create new solutions and new opportunities.”

Mark Zuckerberg did the same in Meta’s November announcement, sharing that the company would prioritize funding and resources toward “high-priority growth areas,” like its AI discovery engine. The company’s AI push has also led to better ad performance by optimizing its ad-targeting tech across Facebook and Instagram to make more accurate projections with fewer data points, the WSJ reported.

And during Meta’s earnings call last week, Zuckerberg emphasized AI and recommendation algorithms, including the AI behind Reels, and not the company’s metaverse products.

“Facebook and Instagram are shifting from being organized solely around people and accounts you follow to increasingly showing more relevant content recommended by our AI systems—and this covers every content format,” Zuckerberg said on the call.

Last year, Meta, Google, and Amazon all debuted generative-AI tools for video or animation. And recently, Microsoft announced an expanded partnership with OpenAI, the creator of text-based generative AI tools like GPT-3 and ChatGPT, with GPT-4 reportedly on the way. Microsoft is also looking into introducing OpenAI’s text tools into Office products like Word, Outlook, and PowerPoint.

As companies push into the AI space, job openings in the field have remained more resilient than in the overall tech world. According to ZipRecruiter data shared with Tech Brew, openings for tech jobs in January were up just over 2% compared to February 2020—in comparison, posts for AI jobs were up 6.3%.

Keep up with the innovative tech transforming business

Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.