In recent years, people have been hired on a large scale “for a different economic reality than the one we are facing today”. Now you have to adapt, wrote Alphabet boss Sundar Pichai on Friday to his employees around the world. 12,000 jobs would be cut, affecting employees across companies and functions, whether administration or product development. “I take full responsibility for the decisions that brought us here,” said Pichai.
According to Alphabet, at the end of September 2022 it employed almost 187,000 people. In addition to the search engine Google, the group also owns the video platform YouTube. Alphabet also offers the Android smartphone operating system.
Clear cut in the entire industry
Numerous US technology companies have cut jobs in recent months. At Amazon, more than 18,000 employees have to go, at the Facebook parent Meta 11,000. Intel, Twitter, HP – the entire industry is currently throwing its people out. In January alone, at least 48,000 people were affected.
The same goes for Microsoft, which only announced severe cuts on Wednesday. 10,000 jobs are affected here, around five percent of the entire workforce. Microsoft justified the measures in response to “macroeconomic conditions and changing customer priorities.” The office locations are also to be reconsidered.
Upheaval at Big Tech
The major rethinking became necessary after the corporations had steadily expanded in the wake of the pandemic. Many companies have “spent like rock stars in the 1980s” over the past few years, analyst Dan Ives told Reuters. The CoV crisis had led to a boom in demand from big tech companies, jobs were needed at home, as were cloud computing and other services.
In the meantime, demand has fallen off sharply again, and rising inflation and the looming recession are also causing problems for the technology sector. Because the tech giants usually put a lot of money into projects that sometimes don’t pay off for years. As a result, they often feel rising inflation rates in particular.
Artificial intelligence as a game changer
Microsoft in particular has recently invested a lot in its start-up partner OpenAI, manufacturer of ChatGPT and other systems with AI. ChatGPT is software that simulates a conversation with a human. Users can type in questions that the program will answer in natural language. However, it can also create its own texts based on a few key points.
Microsoft invested $1 billion in OpenAI in 2019. It was recently said that Microsoft would invest another ten billion dollars in the San Francisco-based company. Microsoft is also working to integrate the ChatGPT software with its Bing search engine. In the longer term, Bing should overtake the industry zampano Google.
Call for help to Google founders
The Google mother Alphabet, on the other hand, is trembling at the progress of ChatGPT: “Code Red” is said to have been issued in the group after the launch of the software last November. According to the New York Times, Alphabet even called its founders Larry Page and Sergey Brin back to the company.
Both left the group in 2019. But now they got a call for help from Google, they may lead the competition against ChatGPT. Brin and Page are said to have met with Pichai’s current Alphabet leadership several times in the past few weeks.
The faster Microsoft can establish ChatGPT software, the more Alphabet, once the AI pioneer, falls behind. But Alphabet has also invested heavily in AI in recent years. The competing product from Alphabet is called the Language Model for Dialogue Applications (LaMDA).
LaMDA is said to be better than ChatGPT but is still being held back by Google. Google faces a dilemma: while LaMDA could be game-changing, it could also destroy Google’s search engine and advertising businesses. The group has not yet found a solution for this.
