Recent workforce reductions at Google and Amazon have indicated that the tech giants are poised to continue cutting jobs in 2024 as they channel substantial investments into generative AI technologies.

Industry analysts and experts anticipate that these layoffs will be more targeted and of a smaller scale this year, with companies racing to gain ground in the AI race opting for such measures to offset their substantial expenditures in the field.

Ernst & Young initiates layoffs, cuts dozens of US partners

Alphabet recently hinted at this trend as it announced its intentions to invest in its “biggest priorities” while laying off approximately a thousand employees across various divisions, including its voice assistant unit and teams responsible for Pixel and Fitbit.

Even its advertising business faced cuts, with reports of hundreds of job reductions surfacing.

Amazon also joined the layoffs wave, releasing several hundred employees in its streaming and studio operations.

The company saw similar cutbacks in its Twitch live-streaming platform and Audible audiobook unit, as reported by media outlets.

In the month of January alone, the tech industry has seen over 7,500 employees let go, according to tracking website Layoffs.fyi.

D.A. Davidson & Co analyst Gil Luria emphasized, “No company wants to get left behind by the AI revolution and they are all making sure they have these capabilities and are prioritizing them, even when it is at the expense of other initiatives.”

Both Google and Amazon are aggressively investing in their AI endeavors. Google, aiming to close the gap with Microsoft in the AI race, unveiled its long-awaited Gemini model last month. Simultaneously, Amazon is developing a model codenamed “Olympus” to compete with OpenAI’s GPT-4 model, the maker of ChatGPT.

Nevertheless, the scale of these layoffs is expected to be significantly smaller compared to the massive workforce reductions witnessed in the previous year, thanks to a more stable economic climate that has prompted increased tech spending.