From Nasdaq:

Big Tech firms will continue layoffs in 2024, analysts and experts predict, pointing to recent job cuts at Google and Amazon as the companies make big investments in generative AI. Over 7,500 employees were laid off in January, and more terminations are anticipated as the tech sector adjusts hiring priorities for roles related to AI. However, employers, including Hinge and Amazon, are offering high salaries for AI roles; this investment, driven by the AI boom, is expected to deepen investor expectations but may take time to produce significant returns.

Both Google and Amazon announced significant layoffs, totaling around 1,000 employees across multiple divisions. Google revealed that its biggest priorities include investing in generative AI after letting go around a thousand employees, including its voice assistant, Pixel, and Fitbit teams. Amazon.com cut several hundred jobs in its streaming, studio, Twitch, and Audible platforms last week; media reports indicated those were included in this round of layoffs.

Google and Amazon are aggressively pursuing AI advancement. Google recently introduced its Gemini model, aiming to close its AI gap with Microsoft, while Amazon is working on a model, “Olympus,” to compete with OpenAI’s GPT-4. As tech spending picks up, expected layoffs will be smaller than last year’s massive tech cuts. In 2023, the tech sector had the highest number of layoffs across industries. The tech sector will prioritize AI roles as companies adapt to market dynamism.

Although investors could see significant returns from generative AI, the payoff for most companies could take longer to materialize. Microsoft and Nvidia are emerging as big winners from the AI boom. Although experts remain optimistic, historical evidence suggests profitability for new technologies could take a decade or more. The question remains: will it be different this time for AI?



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