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Tech layoffs surged in January despite Wall St records

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While the S&P 500 and Nasdaq reach record highs, and tech giants like Alphabet, Meta, and Microsoft achieve unprecedented market valuations, the tech industry is witnessing a surge in layoffs this January.

According to data from Layoffs.fyi, approximately 23,670 employees have been laid off by 85 tech companies in January, marking the highest number since March when nearly 38,000 tech workers lost their jobs.

The wave of layoffs intensified this week, with SAP announcing changes affecting 8,000 employees, and Microsoft reducing its gaming division workforce by 1,900 positions.

High-profile fintech startup Brex also made headlines by cutting 20% of its workforce, and eBay eliminated 1,000 jobs, accounting for 9% of its full-time employees. eBay’s CEO, Jamie Iannone, attributed the move to the need for better team organization and nimbleness.

Google jobs

Earlier in the month, Google confirmed several hundred job cuts across its organisation, and Amazon announced the elimination of hundreds of positions spanning its Prime Video, MGM Studios, Twitch, and Audible divisions.

Unity disclosed its plans to cut approximately 25% of its staff, while Discord, known for its popular messaging service among gamers, is shedding 17% of its workforce.

The recent layoffs are attributed to companies’ efforts to reposition themselves for AI-driven strategies.

The tech industry witnessed a surge in AI demand, leading to workforce reductions in areas that companies believe have become less relevant as they invest heavily in AI product development.

Salesforce reduction

Notably, tech giants like Meta and Salesforce experienced significant stock market gains following cost-cutting measures in 2023. Salesforce, which reduced its workforce by about 10% in January 2023, saw its stock nearly double for the year, its best performance since 2009. Meta also witnessed a stock boost after announcing its cuts, achieving its best year since its Nasdaq debut in 2012.

While tech industry layoffs dominate headlines, other sectors are also witnessing workforce reductions, including the banking sector, with Citigroup announcing a 10% workforce cut, and media companies like Paramount and Levi Strauss announcing layoffs to streamline operations and enhance efficiency.

Despite the surge in layoffs, some experts caution against overreacting to the January data, emphasising the need for a nuanced analysis of trends. Investors await the upcoming tech earnings announcements, which may provide a clearer picture of near-term business and consumer spending outlooks.

Ahron Young is an award winning journalist who has covered major news events around the world. Ahron is the Managing Editor and Founder of TICKER NEWS.

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Money

How will Disney’s AI strategy boost shares?

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Activist investor Blackwells has called upon Disney to implement a robust artificial intelligence strategy aimed at bolstering the company’s shares.

“Disney must produce an artificial intelligence strategy, and share elements of that strategy with its shareholders.”, said Blackwells in a recent presentation.

New groove

Blackwells, known for pushing corporations to adopt innovative approaches, contends that a well-crafted AI strategy could drive shareholder value and position Disney for sustained success in the entertainment landscape.

The activist investor emphasises that harnessing the power of AI could optimise content creation, enhance customer experiences, and streamline operational efficiency within Disney.

Disney’s response

The company opposed the suggestion to replace board members with activists’ nominees, emphasising the potential disruption to ongoing progress.

Additionally, Disney disagreed with Blackwells’ proposal to spin off land and hotels into a real estate investment trust, arguing it reflected a misunderstanding of the synergies within its businesses.

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Money

Boeing woes will lead to higher airfares: Ryanair

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Ryanair, one of Europe’s leading low-cost airlines, is grappling with the possibility of scaling back its summer flight schedule due to ongoing delays in the delivery of Boeing aircraft.

The airline had initially anticipated a boost in its fleet with the arrival of new Boeing planes, enabling an expansion of routes and increased passenger capacity.

However, prolonged delays in the manufacturing and delivery process have cast a shadow over these plans.

Growing pains

The airline industry, already navigating challenges posed by the global pandemic, now confronts the additional hurdle of supply chain disruptions impacting major aircraft manufacturers.

Ryanair’s dependence on Boeing for its fleet expansion has made it particularly vulnerable to these delays.

As the summer travel season approaches, the airline faces the tough decision of either operating with a reduced fleet or adjusting its schedule, potentially impacting travel plans for passengers.

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Gender pay gap – Calls grow for accountability

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The unveiling of gender pay gaps within large Australian organisations marks a significant milestone for gender equality, but experts emphasise the urgent need for greater accountability and action from employers, asserts a University of South Australia researcher.

Professor Carol Kulik, an authority in workplace diversity, underscores the importance of the Workplace Gender Equality Agency’s release of gender pay gap data for large Australian employers as a pivotal step forward.

However, she stresses that the true impact of this revelation will hinge on the proactive measures taken by organizations to address and narrow the existing disparity.

The WGEA’s disclosure will shed light on gender pay gaps among private sector employers with 100 or more employees for the first time.

This move comes amid ongoing efforts to promote and enhance workplace gender equality.

Pay gap

According to the WGEA’s 2023 report, the average gender pay gap in Australia stands at 21.7%, translating to women earning an average of $26,393 less per year than their male counterparts.

Professor Kulik, a member of the SA Gender Pay Gap Taskforce, underscores the importance of further actions to ensure that organizations are held accountable for addressing pay gaps.

“We now must be asking employers important questions,” Professor Kulik asserts.

“In what roles and levels of employment are pay gaps most prevalent? How are employers supporting employees’ caring responsibilities? What measures are being implemented to facilitate women’s advancement into higher-paying roles? How soon can employers commit to closing their pay gaps?”

Tend to escalate

Highlighting the trajectory of pay gaps over time, Professor Kulik notes that initial disparities between men and women at the outset of their careers tend to escalate as pay rises are often calculated as a percentage of an employee’s current salary.

Career breaks and caregiving responsibilities further exacerbate these discrepancies, resulting in women retiring with significantly lower superannuation than men.

Drawing parallels from regulatory interventions in other countries, Professor Kulik underscores the unintended consequences that may arise.

For instance, while legislative mandates in Denmark narrowed the gender pay gap, they also prompted employers to compress salary distributions, impacting both male and female employees.

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