Job cuts continue to impact the tech industry and other sectors, with major companies like IBM, Google, Whirlpool, Walmart, job site Indeed, and Amazon announcing layoffs as part of their cost-cutting measures. IBM recently announced layoffs in its marketing and communications divisions, with the exact number of affected employees unknown. The Chief Communications Officer, Jonathan Adashek, delivered the news during a brief meeting. This announcement comes as a surprise, as IBM CEO Arvind Krishna had been focusing on training employees to adapt to an AI-powered business environment. In December 2023, Krishna mentioned that up to 30% of specific roles could be replaced by AI and automation within the next five years. IBM had previously announced layoffs in January 2023, eliminating 3,900 positions. Despite the job cuts, IBM reported modest growth, with fourth-quarter revenue increasing by 4% compared to the previous year. However, the company faces fierce competition from rivals such as Amazon, Google, and Microsoft in the AI development sector.
Meanwhile, Alphabet-owned Google is also laying off an unspecified number of employees as part of its cost-cutting measures. The layoffs are not company-wide, and affected employees will have the opportunity to apply for internal roles. A small percentage of the impacted roles will be moved to hubs in India, Chicago, Atlanta, and Dublin. The restructuring includes expanding growth to Bangalore, Mexico City, and Dublin. Google had previously let go of hundreds of workers in January. CEO Sundar Pichai had warned employees to expect more job cuts.
In a recent development, Google is implementing a restructure that will result in layoffs and the creation of new roles in the finance and real estate units. The headcount cuts are reported to be large-scale, with some roles being moved abroad to lower-cost job locations. The plan is to create hubs in Bangalore, Mexico City, Dublin, Chicago, and Atlanta to centralize operations for finance teams. The exact number of people affected has not been confirmed. The restructure is aimed at freeing up cash for investments in AI. Google previously laid off 12,000 employees in 2023. The company reported a net profit of $73.8 billion in 2023.
In addition to the tech industry, Whirlpool Corp., a major appliance manufacturer, is also cutting jobs to reduce costs. The company is eliminating about 1,000 salaried positions worldwide as slow US home sales limit demand. Whirlpool has completed its first wave of layoffs of office staff and is planning to start another soon. As of the end of 2023, Whirlpool employed 59,000 workers worldwide.
Furthermore, Walmart is joining the list of companies implementing job cuts. The retail giant is cutting hundreds of corporate jobs and asking most remote workers to move to offices. Workers at smaller offices in Dallas, Atlanta, and Toronto are being asked to move to other central hubs. Walmart will still allow staff to work remotely part-time. Walmart employed approximately 2.1 million associates as of January 31, 2024. The company has been shrinking its workforce and expects about 65% of its stores to be serviced by automation by the end of fiscal year 2026. In February 2023, it shut three U.S. technology hubs and asked workers to relocate. Walmart did not immediately respond to a request for comment.
Job site Indeed plans to cut about 1,000 employees, or roughly 8% of its workforce, in its second round of layoffs in two years. The cuts will focus on research and development and some customer support roles. The company aims to simplify its business and reduce organizational bloat. Last year, Indeed slashed 2,200 positions to trim costs. The new reductions aim to speed up decision-making. The company will also provide more severance pay this time. The layoffs come as the labor market cools and US employers dial back hiring. The move is similar to efforts by Meta Platforms and other companies to become less top-heavy. Middle managers accounted for almost a third of layoffs last year. However, cutting middle managers can backfire as they provide direction and support for entry-level hires. The cuts will not disproportionately impact women, under-represented genders, or under-represented minorities. Some workers in the UK, Ireland, and Australia will also be affected.
Amazon plans to cut 10,000 corporate and tech jobs following a hiring peak during the COVID-19 pandemic. The company had experienced a surge in hiring during the pandemic to meet increased demand for online shopping. However, as the situation stabilizes, Amazon is now implementing cost-cutting measures. The exact details of the job cuts have not been disclosed. Amazon is one of the world's largest employers, with over 1.3 million employees globally as of January 2024. The company reported net sales of $386 billion in 2023, a 38% increase compared to the previous year.
IT companies like TCS, HCLTech, Wipro, and Tech Mahindra are also undergoing significant changes in response to an unprecedented slowdown in the industry. These companies are reorganizing their businesses to prepare for the rise of generative artificial intelligence (Gen AI) and evolving customer demands. TCS, for example, has merged its AI and cloud operations into a unified AI.Cloud unit. Indian IT service providers are making changes to their business structures and senior leadership to navigate disruptions in the industry. The Indian software services export industry is facing an unprecedented slowdown in demand. Companies are building new capabilities with separate units focused on Gen AI and evolving customer demands.
Google, however, is facing a downgrade by Rosenblatt Securities due to concerns over transition risk, including the impact of artificial intelligence (AI) on search. The longer-term impact of AI on search is unknown, but there is a likelihood of at least a "transitionally" negative impact on search ad revenue. There is also evidence of share loss in search to Microsoft's Bing and intense competition from retail media networks like Walmart and Amazon. Additionally, Amazon's aggressive push into video advertising could impact YouTube's ad sales dynamics. Analysts are largely cautious on Google, with a Neutral rating from Rosenblatt Securities and mixed ratings from Wall Street analysts. Seeking Alpha's quant system rates Google positively.
In other tech news, a deepfake scam involving LastPass has been uncovered. LastPass, a popular password manager, was targeted by scammers who used deepfake technology to create a fake video of a LastPass employee. The scammers then used the video to trick users into giving up their login credentials. LastPass has since issued a statement warning users about the scam and advising them to be cautious of any suspicious requests for their login information. This incident highlights the growing threat of deepfake technology and the need for increased awareness and security measures.
Other tech stories that may have been missed include Microsoft's decision to unbundle Office and Teams, offering them as separate products to provide more flexibility for users. OfficeSuite is also emerging as an alternative to Microsoft Office, offering similar features and compatibility at a lower cost. Google Workspace has introduced GenAI pricing and a new Vids app, further integrating AI capabilities into its productivity suite. Ikea is training its employees in AI to enhance customer service and optimize operations. Apple has revealed its plans for on-device AI with the upcoming release of iOS 18, aiming to bring AI capabilities directly to users' devices while prioritizing privacy and security. Zendesk has unveiled new AI features to improve customer support and streamline workflows. Salesforce has launched an AI beta program with Einstein Copilot, an AI-powered assistant designed to help sales teams with tasks such as data entry and meeting preparation. In the fast food industry, Taco Bell and Pizza Hut are going 'AI-first,' leveraging artificial intelligence to enhance customer experiences and drive operational efficiency.
The job cuts in these major companies reflect the ongoing challenges faced by various industries, including the impact of AI and automation, fierce competition, stagnant demand in certain sectors, and the cooling labor market. The deepfake scam serves as a reminder of the increasing sophistication of cyber threats and the need for robust security measures. The other tech stories highlight the continuous evolution and integration of AI technology across different sectors, as well as the efforts of companies to adapt and innovate in a rapidly changing digital landscape.