Wednesday, June 19, 2024

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Meta Efficiency Layoffs: Where Next for Big Tech in 2023?

The downsizing of Meta comes as part of the company’s ‘year of efficiency’, a plan which aims to tackle declining value and an uncertain economic climate. However, a new research report from Trachet, highlights the very real cost that layoffs can have on a workforce with a staggering third (33%) of respondents stating they have seen their workplace’s headcount decrease and their workload increase in the last 12 months – seemingly causing a mass strain within the sector.

This also leaves staff who have witnessed layoffs fearful for their financial futures due to a lack of job security, posing a risk for big tech losing their top talent to smaller industries.  Furthermore, these mass layoffs are being amplified by companies incorporating AI technology. A clear example of this is British telecoms giant, BT, which is the latest to announce they will be cutting 55,000 jobs, with one-fifth of those positions being replaced by AI. BT’s decision is a clear indicator of layoff fever – although potentially necessary – which embodies the new business model which sees companies replacing staff with AI.

However, Claire Trachet asserts that there could be one unexpected effect of these layoffs which could contribute to the increased digitalisation and advancement of other sectors. With titans such as Google, Alphabet, Microsoft and Amazon all cutting headcounts, these talented tech employees will be looking for new jobs and smaller players in different industries will be able to attract these people for the first time. This could have significant positive effects in terms of levelling up businesses which previously have struggled to keep a pace with technological advancements. Serving as testament to this, a poll of small businesses across the UK, conducted by the Department of Education, previously found that 46% of businesses stated that a shortage of staff with the correct skill set was one of their top concerns this year.

Claire Trachet, CEO/Founder of business advisory, Trachet, cites economic downturn and AI advancements as key factors contributing to layoffs, but also explains how smaller companies will benefit from new talent amid skills shortage:

“Mass layoffs obviously risk damaging company culture to the point of no return and they can make it incredibly difficult to attract great talent that will help the business thrive. Across the tech sector employees now often fear for their financial futures because layoffs have become so normalised. This will make it difficult for bigger tech companies to continue to retain staff, which will ultimately lead these workers to not only smaller tech startups, but also firms in different industries entirely. 

“Although AI has brought about a wave of excitement, with its popularity soaring amongst many companies and investors, the trend of layoff fever in favour of AI is now spreading out across various industries. It’s extremely important for companies who are looking to replicate this, to take a step back, pause, and reflect on their business model. There needs to be an understanding as to whether AI is particularly needed within your company and whether it will serve to benefit your consumers.

“There also needs to be caution taken amongst the safeguarding concerns surrounding AI. Businesses must question whether they have the correct in-house team to not only implement this kind of technology, but also manage the risks that come along with it. Instead, businesses could look at other ways to manage cash flow and growth, for instance, looking to their CFO, whose experience should anticipate the hurdles the business may face and help create optionality – preserving critical jobs.

“Cutting down staff should always be the very last resort. Instead, companies should be mindful of their budgeting and think about reallocating all of their resources where they can, based on what they have versus what they can deliver, in terms of tools, people and organisation. And through this, after three months, they will slowly see the benefits, and by six months, the company can be on a completely different playing field.”

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  1. finova Upgrades Award-Winning Origination Platform Apprivo To Drive Operational Efficiency For Clients Amid Rate War Read more
  2. Gilion Appoints Andreas Hedlund as New CFO and Deputy CEO Read more
  3. FINOM Brings Integrated E-Invoicing and Business Banking to Italian SMEs with Launch of Business Accounts and Local IBAN Read more
  4. More Than Two Thirds Of Financial Services Organisations Say Network Security Threats Have Increased In The Last 18 Months, According To New Daisy Research Read more
  5. Monavate and Know Your Customer Collaborate to Reinvent Compliance Across the European Payment Solutions Read more