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TechTranscript
00:00 The tech sector shed more than 386,000 jobs in 2022 and the first half of 2023.
00:07 And that number is climbing.
00:08 Google today joined a growing list of tech giants scaling back, adding to the tens of thousands of workers in the industry who find
00:16 themselves unemployed.
00:17 It is Amazon doing another round of layoffs.
00:20 Mark Zuckerberg's year of efficiency back in focus this morning after another round of sweeping layoffs and job cuts.
00:27 There's an email that was sent out in the morning to everyone in the company, "Please say unfortunately your role is impacted."
00:33 And that's how I found out.
00:35 And then they pretty much shut everything off at the end of the day.
00:39 I was on the committee that was hiring new college grads.
00:41 It was like thousands and thousands of applications for maybe like 10 or 15 spots.
00:47 But I thought, you know, if we're still hiring new college grads, clearly the company is fine.
00:52 Why would we hire new grads if the company were going to do layoffs?
00:57 Known for its boom and bust cycles, tech has seen its fair share of layoffs in recent decades.
01:02 More recently, the industry has faced headwinds related to the crypto crash and the failure of the Silicon Valley bank.
01:09 Job postings for software development positions, they're down closer to 60 percent year over year, and they are actually below their
01:17 pre-pandemic levels.
01:18 So we've seen a much starker pullback in hiring for software development, which is a lot of tech jobs.
01:27 But while layoffs have taxed retrenched workers, a booming artificial intelligence market is giving the industry a renewed sense of
01:33 optimism. I have been in San Francisco for almost 12 years now, and I have never felt this kind of energy.
01:40 And I was here for the mobile boom, right?
01:41 I worked at Uber, which I think was the one company representing that mobile explosion.
01:45 And I can tell you it was nothing like this.
01:47 Every cafe, every restaurant, every conversation that you overhear in the street, half of the time it's JGPT, it's AI, it's the
01:54 latest company that's being funded.
01:56 It's it's exhilarating.
01:57 Generative AI startup deals announced are finalized in the first quarter of 2023, totaling more than $12 billion, compared with
02:05 about $4.5 billion invested in the space in 2022.
02:09 Amazon, Alphabet and Microsoft have also made massive investments.
02:14 The U.S. tech industry accounts for 10 percent of the nation's GDP.
02:19 It employs roughly 12 million people who work in more than half a million companies.
02:24 Those businesses are concentrated in a handful of coastal areas, including San Jose, Washington, D.C., San Francisco, Boston and New
02:32 York City. So how have layoffs impacted tech workers?
02:36 And what will the AI boom mean for their future?
02:50 The pandemic and ensuing lockdowns brought the U.S.
02:53 economy into a tailspin in March 2020, forcing businesses to shut their doors.
02:58 By May, 23 million Americans lost their jobs.
03:02 The unemployment rate surged to 14.7 percent, the highest since the Great Depression.
03:07 But tech companies faced a different climate.
03:09 Remote work and cloud computing meant more people were pivoting towards online services, boosting revenue.
03:16 Spurred on by rosy predictions and lower interest rates, Microsoft, Amazon, Salesforce, Facebook parent Meta and Google parent
03:23 Alphabet went on a hiring spree.
03:25 Meta had about 72,000 employees at the end of 2021, more than 60 percent higher than 2019.
03:32 Alphabet had more than 190,000 on staff at the end of 2022, 59 percent higher than 2019.
03:39 But after years of unstoppable growth, big tech's pandemic bubble burst, forcing tech companies to trim their rosters.
03:46 I want to say upfront that I take full responsibility for this decision.
03:53 I'm the founder and CEO.
03:56 I'm responsible for the health of our company.
04:00 Meta was a company I've always wanted to work at.
04:04 Dream job, a dream company for sure.
04:06 Carl Wheatley, a recruiter for Meta, grew up in the Bay Area and spent four years working for the social media giant.
04:12 Meta laid off more than 11,000 workers, or about 13 percent of its workforce, in November 2022.
04:18 It announced a few months later it was reducing its headcount by another 10,000 employees.
04:23 I was talking to my family about it.
04:25 They grew up in the Bay Area.
04:26 They've been through multiple layoffs over the past.
04:29 And I think for our age group, I would say this is probably one of the biggest downtrends for layoffs.
04:38 Other companies quickly followed suit.
04:40 If you want to think about a company that overbuilt during the pandemic, I'd say that Amazon is the number one company that overbuilt.
04:50 Where is, where are the cuts?
04:53 Amazon announced in January 2023 that 18,000 workers were being laid off.
04:59 Two months later, it said an additional 9,000 positions would be trimmed.
05:03 That same month, Alphabet cut 12,000 jobs, or about 6 percent of its workforce.
05:08 I thought, holy crap, I finally made it.
05:11 I'm working at probably one of the best companies in the world.
05:14 And I'm making an amazing salary.
05:17 And I have longevity.
05:18 Like, I am good for many, many, many, many years.
05:21 Paul Baker, a video producer in tech, worked at Google for six years.
05:26 We all got this email early in the morning on January 20th.
05:31 It just hit me like a ton of bricks.
05:33 I actually froze going, wait, is this for real?
05:36 I opened my work laptop and it says, no, access denied.
05:39 Like, no passwords are working.
05:41 So I had to look at my personal laptop, which had an email from them stating, hey, you've been officially terminated.
05:49 We're giving you two months notice, but like, you're cut off.
05:52 You're banned from going to any Google office.
05:54 You cannot contact anyone.
05:56 Like, nothing.
05:57 Company leadership was in a far different position.
06:00 Alphabet CEO Sundar Pichai's 2022 compensation, for example, was worth $225 million, about 800 times the pay of the median employee.
06:10 The company's stock has continued to climb since the announcement.
06:13 Other companies in the space that made cuts to their workforce include Microsoft, Salesforce and SAP.
06:24 While tech layoffs have been painful, the blow has been cushioned in many cases by generous severance packages.
06:30 Recently laid off Google employees in the U.S.
06:33 received 16 weeks of pay, plus two weeks for every year of employment.
06:37 Salesforce employees received a minimum of nearly five months of pay.
06:42 Stephen Campbell, a software engineer, was laid off from Airtable, a cloud-based project management service, in December 2022.
06:50 One night I stayed up, especially late, and woke up to a bunch of Slack messages saying, "Are you safe? Are you OK?"
06:59 And I thought, like, was there an earthquake in SF?
07:01 Like, what's going on?
07:03 Obviously, I'm safe.
07:04 I feel fine.
07:04 And as I woke up a little more, I thought, "Oh, no, like, I know what this is."
07:08 And so I, like, open up my work laptop and I got a notification saying, like, "Your access to this laptop will end in 30 minutes."
07:16 With help from a severance package, Campbell co-founded two new businesses.
07:20 Revamp AI uses machine learning and Generative AI to get insights into customer data sets.
07:25 His other business hosts in-person events to discuss the future of Generative AI.
07:30 The thing about Generative AI in San Francisco right now is that there's similar buzz to crypto, right?
07:37 There's all these meetups, which I'm fortunate to throw some of them.
07:40 There's all this venture investment going into it.
07:43 I mean, absurd amounts of money is getting funneled into Generative AI startups.
07:47 The difference for me between Generative AI and something like crypto is Generative AI is solving problems for people today.
07:55 It's delivering value for people today.
07:57 San Francisco has 11 out of 20 of the top AI companies in the U.S.
08:02 by dollars raised.
08:03 Collectively, those businesses took in $15.7 billion between 2008 and 2023.
08:10 Investments in automation and AI at big tech companies could be a contributing factor in recent layoffs.
08:16 Meta CEO Mark Zuckerberg told employees prior to its third round of layoffs that investments in tools like AI would help engineers write better code faster and automate workloads.
08:27 Flo Crivolo founded Lindy in 2022.
08:30 The company's AI personal assistant helps automate tasks for workers, like drafting emails, sending calendar invites and taking notes during meetings.
08:40 Something absolutely huge is coming.
08:42 And I don't think people have quite realized that yet, that everything is about to change, especially the information economy and knowledge workers.
08:51 Steve Jobs said that computers were like a bicycle for the mind.
08:55 I think that AI is like a jumbo jet for the mind.
08:58 I think it is going to radically change how people work and go about their lives.
09:02 Generative AI could add as much as $2.6 to $4.4 trillion to the global economy annually.
09:10 I think counter-intuitively, it is actually going to result in a net increase in employment in the tech industry.
09:15 It's a basic fact of economics that when something becomes cheaper, its complement becomes more valuable.
09:20 Tech workers are a complement to AI.
09:22 AI makes tech workers a lot more productive.
09:25 And so when something becomes a lot more productive and a lot more valuable, we want more of it, not less.
09:30 I don't know if I necessarily would want to say that I don't regret getting laid off sooner, but getting laid off was such an overall positive experience to me.
09:40 Really, the only downside to it was the initial shock that was tough to deal with.
09:45 While layoffs are having a big impact on tech companies, the sector is accustomed to periods of growth and contraction.
09:55 Tech has always been an industry with a very high churn, and that actually comes from both sides.
10:01 So job seekers have always really valued the flexibility that they have in order to jump from tech company to startup to major company to really grow their career.
10:11 And at the same time, tech, because it's often at the forefront, has been a subject to big booms and busts.
10:17 The bursting of the dot-com bubble two decades earlier eliminated more than one million jobs.
10:23 The Great Recession spurred additional cuts.
10:26 By 2008, Silicon Valley tech companies employed 17 percent fewer workers than in 2001.
10:32 But there are a few key differences this time around.
10:35 Even though two thirds of tech workers are men, more than half of those laid off in 2022 and 2023 were women.
10:42 According to a study analyzing more than 1100 LinkedIn profiles, the groups most heavily impacted by layoffs include HR and talent sourcing, software engineers and marketing employees.
10:54 Bianca Brown started with Meta in 2019.
10:57 She was laid off from her job as a program manager in 2023.
11:00 I tried to sleep the night before I couldn't.
11:02 And then maybe it was around the 8 a.m.
11:05 mark, I got the email.
11:06 My heart kind of dropped.
11:09 You know, I took a deep breath and I was like, OK, you know, this this is your new reality.
11:16 This is something you have to navigate.
11:19 The study also found 48 percent of laid off employees were between 30 to 40 years old, 89 percent were based in the U.S.
11:25 and the average employee had about 12 years of work experience.
11:29 And while the number of U.S.
11:31 tech jobs are projected to slightly lag the longer term trend, the demand for tech workers should remain high for the foreseeable future.
11:38 The unemployment rate for tech workers as of May 2023 was 2 percent, well below the national figure of 3.7 percent.
11:47 While tech companies shed a modest 4,700 jobs that month, over the course of the entire year, a significant number of jobs were added in
11:55 IT services, cloud infrastructure, data processing and hosting and tech manufacturing.
12:01 Employment opportunities for software developers is predicted to grow by 26 percent between 2021 and 2031.
12:08 It is a cooler job market for tech workers than it was maybe a year or two ago.
12:13 But at the same time, a lot of these skills and experiences from the tech sector are still in high demand.
12:19 Oftentimes, these tech skills and this experience from the tech industry is very valuable in other parts of the economy as well.
12:27 Tech workers are also finding jobs in other industries desperate for their skill set, ranging from financial services and manufacturing to the
12:34 government. Nationwide, tech workers earn on average $87,000 annually, 60 percent more than the average U.S.
12:43 salary of $54,000.
12:45 California tech workers average about $117,000 a year.
12:50 Despite those trends, competition for jobs remains fierce as unemployed workers face a restless job market.
12:57 I've already applied to probably about 165 jobs and I've had only two interviews and both were first interviews after the recruiter and
13:09 they ghosted me, like didn't respond to my emails, nothing.
13:13 So we're also living in a time where people just don't get back to you.
13:16 But if you go on LinkedIn, there's so many recruiters and designers, engineers, everyone in looking for jobs, right?
13:23 There's hundreds or thousands of people applying for the same role.
13:27 I just tell people, put your sales cap on, get a tool where you can find emails and you kind of have to go out there and kind of find your own job.
13:34 [MUSIC]