SEATTLE — Cuts in the tech industry have affected over 5,000 workers in Washington since Microsoft, Amazon, Meta, and Google announced layoffs starting late last year.
According to the companies, the cuts were intended to help cut costs after declines in revenue.
During the COVID-19 pandemic, tech companies hired thousands of workers to help meet the growing demand for services — now many of those people are out of a job. The tech industry has been struggling to maintain 2020 and 2021 levels of profit, as life returns to normal for many after the pandemic.
First-quarter earnings reports have been rolling out on Wall Street since April 17. The reports show the total operating profits, among other data points, that showcase trends from year to year and can help predict growth, or trouble, within a company.
After the closing bell Tuesday, Alphabet, Google’s parent company, and Microsoft released their first-quarter earnings reports. Both companies saw growth during the first three months of 2023, and stocks improved for the companies Wednesday morning. As of 9 a.m. Wednesday, Microsoft’s stocks were up 8.12 % to $298.745 and Google’s was up by 0.55% to $105.175.
The reports came in above what financial analysts were expecting. Google’s total operating profits came in at $17.4 billion and Microsoft’s total profit was $18.3 billion, a 7% increase from last year.
While profits numbers have grown since the last quarter of 2022, there were also drawbacks in the reports. Google’s click rates and ad revenue were down. Microsoft’s PC sales fell nearly 10%.
Although both companies are predicted to see further growth throughout the year, employees, stockholders, and on-lookers will have to wait to see whether the cuts truly helped boost the companies’ profits.
In March, Google employees signed a letter to CEO Sundar Pichai asking for Alphabet to protect workers' rights during layoffs, specifying the desire to freeze new hires, grant priority rehire for those laid off, and respect scheduled leaves.
"Our company has long touted its commitment to doing right by its users and workers, and these commitments will show Alphabet adhering to the final line of its Code of Conduct: Don’t Be Evil," the letter said.
In Alphabet's conference call following its report release, the company looked forward to its plans for future growth.
"I’m pleased with our business performance in the first quarter, with Search performing well and momentum in Cloud," said CEO Sundar Pichai. "We introduced important product updates anchored in deep computer science and AI. Our North Star is providing the most helpful answers for our users, and we see huge opportunities ahead, continuing our long track record of innovation."
The layoffs were not mentioned during the call.
Microsoft launched its AI tool ChatGPT late last year, after a billion-dollar investment deal with its creator OpenAI. Since then, Google has been trying to play catch up, offering a beta version of its own AI tool “Bard,” to some users. While ChatGPT has been successful, it has not brought in the money the company is looking for.
Wednesday morning, the UK blocked Microsofts $69 billion bid to buy video game maker Activision Blizzard, citing concerns of monopoly. Activision Blizzard's stock fell 11.64%, as Microsofts' continued to rise.
Amazon’s second round of layoffs takes effect Wednesday. Further layoffs are anticipated in late May.
In a letter to Amazon employees, Adam Selipsky wrote "Conversations with impacted AWS employees started today...It is a tough day across our organization."