The layoffs at Microsoft and other tech companies have much more to do with current economic conditions than recent AI breakthroughs
But last year, economic headwinds shifted. First, habits shifted as people re-entered public spaces, lessening the importance of at-home tech services. “There was this idea that the pandemic would mark this kind of permanent change in behavior: that everyone would be working from home and wouldn’t go to stores or movie theaters. And that just turned out not to be correct,” Benanav says.
The impact on the tech world has been particularly intense: More than 150,000 tech workers were laid off in 2022, according to the trackerMicrosoft was among those companies. While Microsoft relies less on advertising dollars than competitors like Google and Meta—an area which has fallen off precipitously in the last year—its cloud services and hardware divisions still took hits.
Nadella, in his open letter, wrote that Microsoft would eliminate roles in some areas while continuing to hire in other areas. It seems likely that AI will be part of the latter category. Like many other tech companies, Microsoft has invested heavily in AI, based upon the belief that its abilities will increase efficiency in every area. Earlier this month, Semafor reported that Microsoft hopes to invest anotherChatGPT does not yet have a business model to earn revenue for OpenAI or Microsoft.
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