Big Tech job cuts represent ‘strategic’ move
The first few weeks of 2024 have brought job cut announcements from some of the biggest media and tech companies.
These include Amazon, with redundancies affecting its Twitch, Audible, Prime Video and MGM Studios businesses. Hundreds of job losses were also announced by Google, across its Pixel, Nest, Fitbit, engineering and Assistant divisions, as well as Disney-owned Pixar.
Last year, lay-offs affected multiple tech companies including Meta, Microsoft, Google, Amazon and Spotify.
Analysis: Strategic shift for Big Tech
For Alice Enders, head of research at Enders Analysis, these recent announcements were different to those in previous years.
She said: “The primary reasons for this round of cuts by Big Tech are strategic rather than cost-cutting. Google, for example, is reorienting its operations towards AI tools for advertisers and that requires a specific set of skills in its operations.
“And [it is] reducing or indeed eliminating non-strategic operations, such as resources occupied by the Voice Assistant or AR, which were all the rage a while ago. Amazon also cut its Voice Assistant investment, for example.”
However, Enders stressed it was not “the same driver” for job cuts in the case of every company.
For example, she said Spotify, Google and Meta “over-hired” in the pandemic as digital advertising boomed and the cutbacks that the companies made last year “addressed that problem of sales teams being too big in relation to revenues and squashing margins”.
In a recent column, Steve Doyle, director of Four Stars Recruitment, wrote that while 2023 was “an incredibly tough year”, especially for senior talent, there were “signs of cautious optimism”. In 2024, it’s “an employer’s market” with fierce competition.
This means job cuts at major media and tech companies will have repercussions on the wider jobs market.
He told The Media Leader for this piece: “The impact of job losses either at large platforms and small businesses is an increasingly large candidate pool. This is making competition for roles more intense and people perfectly qualified to do jobs sometimes not even getting an interview.
“The market needs more stimulation from new and expanding areas of the market — which, by the rise of the platforms taking so much of the advertising pie, has got a lot tougher to do.”
Ian Benjamin, managing director of Digital Execs Recruitment, echoed these comments, telling The Media Leader that it was “a real mixed bag” why these companies were making cuts, adding that the tech job market had “flipped” from being employer-led to client-led.
He said: “We’re waiting for the market to turn this year because of redundancies. The market was flooded with candidates. A year before that, it was employers reaching out to ask for candidates.”
He said tech redundancies started towards the end of 2022 and that while some areas are “still quite buoyant”, on the whole “a lot of recruiters have struggled in tech”, with lots of employees, such as developers, out of work.
And it’s not only big tech groups examining their workforce, as Benjamin said smaller companies in the space were being “more reactive” to what the market was doing and “tightening their belts” when it comes to hiring.
“I’ve got loads of candidates but no vacancies. We want a mix of both,” he explained. “It’s either feast or famine and, speaking overall, some recruiters have found a niche like the AI machine learning space, which seems to be growing and doing quite well, But other tech development-type roles — that’s where there’s been a big slowdown.”
Looking to 2024, he predicted fewer job cuts than the previous year but at the same time more contract work rather than permanent roles.
