Silicon Valley is not done with layoffs

The year 2024 is off to a bad start in Silicon Valley. After Unity, Prime Video (Amazon) and Twitch, it is Google’s turn to plan layoffs. The Mountain View giant should let go of several hundred people working in its engineering division, its equipment branch which manufactures its Pixel phone, its Fitbit watches and its Nest thermostat, and on its Google Assistant virtual assistant, according to several professional media and the New York Times.

At this point, Google - which has 182,000 employees worldwide - has only confirmed a portion of the Google Assistant-related layoffs. “Our responsibility is to invest in the company’s key priorities, and in the major opportunities ahead,” said a spokesperson for the group.

Job cuts deemed “unnecessary” by one of the company’s unions, The Alphabet Workers Union. “Our members work hard every day to design quality products for our users. The company cannot continue to fire colleagues when it makes billions of dollars in revenue each quarter,” this union declared on X (ex-Twitter).

The black streak has continued since the beginning of January. Another tech giant, Amazon, announced successive layoffs within its streaming subsidiary Prime Video (around a hundred positions) and its Twitch platform. After doubling its workforce during the health crisis, the latter is expected to lose 500 positions, or 35% of its teams. Last year, it had already suffered two waves of layoffs of 700 positions in total. “We are too big for the actual size of our market,” CEO Dan Clancy said. The platform, bought by Amazon in 2014 and which is still not profitable, announced that it would cease its activity in February in South Korea due to excessively high internet network costs.

The American champion of software dedicated to video game designers, Unity Software, unveiled on Monday a plan to cut 1,800 positions, or 25% of its workforce, in order to refocus “on its core business”. During the pandemic, Unity expanded its activities into special effects for audiovisual and digital twins for industry.

Are these layoffs a harbinger of another dark year in Silicon Valley? In any case, they are a continuation of those announced in 2022 and 2023. The tech giants are striving to adjust their strategy to the troubled economic and geopolitical context but also to the return to normal of post-consumption habits. Covid. Some had also erred on the side of optimism in their growth forecasts and had hired in droves.

In the video game sector (Epic Games, Xbox, etc.), 9,000 people lost their jobs last year. For its part, Amazon had to let go of 27,000 employees. Same thing for Google. Since July 2022, its CEO, Sundar Pichai, has worked to refocus the company's strategy and reduce expenses. Just a year ago, it let go of 6% of its workforce, or 12,000 people, the largest layoff plan in the group's history. Since then, its leaders have made it clear that the search for savings will continue, with Google having accelerated the pace of generative artificial intelligence.