Big Tech, mass and crocodile tears

March 15, 2023:

Software giant Microsoft’s employees in recent times received an email with the subject line - “Focusing on our short- and long-term opportunity”. It came from the company’s Chief Executive, Satya Nadella. A subject line like that would make any employee think it’s a mail from the boss probably about company strategy, right? It was actually a sacking letter that was shot off to 10,000 Microsoft employees who’ve been serving the Big Tech firm for months or years.

In hindsight, the subject line of Nadella’s shocking email seems like a cruel joke. But it wouldn’t come as a surprise to those following the ways of Big Tech, sans the tinted glasses with which these US-headquartered MNCs are revered and idolised by the mainstream media.

Through the years, these behemoths have been cherry-picking the world’s most talented youths with the lure of hefty packages to expand their business, and eventually booting them out without batting an eyelid whenever they feel like cutting costs.

Take for instance, Microsoft, which was founded by Bill Gates and Paul Allen on April 4, 1975. Apart from the 10,000 employees it has decided to fire by March 31, it had laid off thousands of employees in 2017 in a move it called a “broad reorganisation” of its sales unit. Three years before that, the American company sacked 18.000 people right after acquiring mobile phone manufacturer Nokia’s devices and services business.

The ongoing season of firings is not limited to Microsoft. It spans the gamut of tech giants (or tech monsters?) that are ruthlessly scaling back.

Google’s parent Alphabet recently declared it has decided to wipe out about 12,000 jobs, or 6% of its global workforce. Jeff Bezos-led Amazon announced it was showing the door to over 18,000 workers in the US and Canada. Social media behemoth Meta, which owns Facebook, last year issued the pink slip to 11,000 employees, or 13% of its workforce. Microblogging platform Twitter, now owned by Tesla CEO Elon Musk, terminated

50% of its workforce and is planning to make more heads roll. Snap, the parent company of the social media platform Snapchat, threw out 20% of its staff.

HP also said it is planning to axe 4,000-6,000 jobs over the next two years. IBM has joined the firing party, announcing 3,900 sackings, and so has software giant SAP, which is planning to fire 3,000 people.

The list is getting longer by the week. The season of sackings just isn’t ending.

The companies have given various reasons to shrink their staff strength. Reduced earnings, economic downturn, sluggish demand, rising spending after the pandemic are pitched as reasons to justify the sackings. But experts say the tech giants were not in very bad shape, after all. They say the companies were sitting on a pile of cash less than a year ago. An analysis done by the Investor’s Business Daily in February last year said 13 nonfinancial companies in the S&P 500 were sitting on cash and investments worth one trillion dollars. The 13 companies included Alphabet and Microsoft.

Also, some companies such as Amazon India have actually been doing decent business. The smartphone business of leading online store Amazon India jumped 30% year over year in 2022, notwithstanding a drop in the total number of smartphone shipments. There is a positive outlook for the smartphone shipment business this year, with data analysis firm Counterpoint Research expecting smartphone shipments to go up 10% at 175 million units.

However, that hasn’t saved the jobs of Amazon India employees, an unspecified number of whom – so long working from home – were recently summoned to in-person meetings and fired.

Sack And Invest

The dark episode has exposed the double standards practised by some of the tech firms. While kicking their employees out, many of them were simultaneously pumping in huge money to expand their business empires.

Two days before announcing the layoffs, Microsoft outlined plans of investing in OpenAI,