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SAN FRANCISCO – The wave of layoffs that has swept Silicon Valley over the past two years isn't over yet.
On Wednesday, Google confirmed that it had cut hundreds of engineering and hardware jobs to cut costs and refocus on artificial intelligence. On the same day, Amazon announced it would cut some jobs in its Prime Video and MGM Studios entertainment divisions. Twitch, a video game streaming company owned by Amazon, also announced it would lay off 500 employees.
The cuts at two of the industry's largest and most profitable companies show that the tech world is not yet done with the waves of layoffs that began in 2022. After a massive hiring boom in the early years of the pandemic, startups and Big Tech companies alike have laid off tens of thousands of workers as higher interest rates make investing in new projects more expensive and companies look to increase profitability rather than focus on growth to concentrate.
Workers were laid off here in 2023
At Google, the cuts were a continuation of layoffs affecting teams including navigation app Waze, recruiting and Google News.
“In the second half of 2023, some of our teams made changes to become more efficient and work better, aligning their resources with their biggest product priorities. Some teams continue to make such organizational changes,” said Chris Pappas, a Google spokesperson. “We are investing responsibly in our company’s biggest priorities and the significant opportunities that lie ahead.”
Wednesday's cuts affected the company's hardware division and included a reorganization of teams working on Fitbit, the Nest home device division and Pixel smartphones.
Google has invested billions of dollars over many years to build hardware and compete with Apple in the smartphone and smartwatch markets and Amazon in home devices, but the division is still small compared to its core businesses of advertising and search.
The cuts at Amazon and Google this week are small compared to the many thousands of workers the two companies laid off in 2022 and 2023. Amazon said it would cut around 27,000 workers starting at the end of 2022 and continuing through 2023. Google cut 12,000 jobs in January 2023, about 6 percent of its workforce. Meta, Facebook's parent company, announced in late 2022 that it would cut 11,000 jobs, or 13 percent of its workforce.
The layoffs rocked Silicon Valley and ended the era in which tech workers were confident they could move from high-paying job to high-paying job every few years. Start-up funding also fell. The gloom has only been tempered by the artificial intelligence revolution, as investors pour money into AI startups and Big Tech firms postpone some of their spending-cutting plans to buy more computer chips and hire AI researchers to capitalize on consumer interest to benefit from the new technology.
“Our industry continues to evolve rapidly and it is important that we prioritize our investments for the long-term success of our company,” Mike Hopkins, senior vice president of Prime Video and Amazon MGM Studios, said in a letter to employees on Wednesday.
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