The technology industry is cutting jobs as it seeks to boost profits and integrate artificial intelligence (AI) into its systems. Microsoft, Alphabet, and Meta reported an average increase in profits of 4.5% in the previous quarter. Amazon is predicted to increase its first-quarter profit by eight times the preceding quarter, according to YipitData.
In the current quarter, companies are expected to highlight the potential of AI. For instance, Microsoft integrated OpenAI’s ChatGPT into Bing, which will compete with Google. Amazon’s AWS has released a suite of technologies to assist in the development of chatbots. Meanwhile, Meta has developed an AI model that recognizes individual objects in images.
The cloud businesses of Amazon, Google, and Microsoft have been more stable than anticipated, with stocks for Microsoft and Alphabet rising 19% so far this year. Apple and Amazon are up 28% and 23%, respectively, and Meta shares have gained almost 77%. However, Apple is experiencing a slowdown in demand for iPhones and MacBooks as consumers reduce spending.
Despite the economic slowdown, the technology industry is expected to continue investing in AI and leading its development. The sector is also under pressure to improve cash flow, resulting in companies cutting jobs. For instance, ride-hailing company Lyft intends to cut at least 1,200 jobs as it tries to become profitable and compete with Uber. Meta is reportedly planning to lay off 4,000 employees, just four months after cutting 11,000 jobs. Accenture announced that it would cut 18,000 jobs over 18 months, while Amazon plans to remove employees from some teams.
The industry is bullish on AI development, with major players investing heavily in the technology. However, the job cuts may not be over yet, as tech companies continue to focus on improving cash flow amidst the economic deceleration.