Recent global economic instability has hampered growth and resulted in significant layoffs in the technology industry. Layoffs and employment losses have impacted nearly every sector of the IT industry, from start-up Web3 developers to established industry giants and everything in between. Even though tech industries declared significant layoffs from the beginning of the pandemic to the years after, 2023 appears to be significantly worse. Yet, these layoffs may have had both positive and negative consequences.
Layoffs in the Tech Industry
According to recent data from Layoffs.fyi, tech companies laid off 101,657 workers in the first six weeks of 2022, which equals 64% of all tech business layoffs. Among these companies are the well-known Amazon, Microsoft, Google, IBM, SAP, Salesforce, and Facebook’s parent company, Meta.
Microsoft: On January 18th, CEO Satya Nadella announced significant layoffs. The firm also announced layoffs for employees working on its HoloLens, Surface laptops, and Xbox products. The layoffs, according to Nadella, were part of a more significant attempt to “streamline our operations, enhance agility, and focus on our core areas of innovation.” He also mentioned that the corporation intends to invest in other sectors like cloud computing, artificial intelligence, and gaming.
“Today, we are making adjustments that will result in the reduction of our entire personnel by 10,000 individuals by the end of the first quarter of 2023,the layoffs represent less than 5% of the overall staff base”
Satya Nadella , Executive Chairman and CEO, Microsoft
While Microsoft laid off around 10,000 employees, Amazon is laying off an unbelievable 18,000 employees. This total includes layoffs in November 2022 and also represents about 6% of Amazon’s staff. According to a company statement, the layoffs are part of a larger effort to “streamline operations and boost efficiency” as the company grows and evolves. Amazon also stated that the layoffs result from the company’s routine reviews of its workforce, and affected employees will get severance compensation alongside other assistance.
Alphabet Inc., Google’s parent company, announced plans to lay off 12,000 people, or 6% of its global workforce, in January 2023. Alphabet announced four months after reporting revenue and profit numbers for its third fiscal quarter that were lower than expected. While overall revenue growth at Alphabet slowed to 6% in the third quarter, revenue from Google Cloud surged 38% year over year to $6.9 billion. According to estimates, the business has laid off approximately 450 employees in its India unit. Sundar Pichai, CEO of Google India, indicated that the firm was forced to lay off staff due to overhiring during the latter two years of the COVID-19 pandemic.
“We’ll need to make tough choices. We’ve undertaken a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company. The roles we’re eliminating reflect the outcome of that review. They cut across Alphabet, product areas, functions, levels and regions.”
– Sundar Pichai,CEO, Alphabet and Google
According to The New York Times, IBM announced the layoff of 3,900 employees in January 2023. The layoffs, according to the corporation, were primarily the outcome of prior asset sales rather than a weakness in its business. IBM spun out its legacy technology services business, Kyndryl, as a separate company in 2021. In addition, it divested its health care data analytics division last year.
“IBM is the latest in a long line of major companies to lay off huge chunks of their workers this month, as big tech continues to feel the impact of economic downturns. The market appears to be underwhelmed by the scale of the announced job losses, which only amounted to 1.5 percent of the workforce.”
Jesse Cohen, Senior Analyst, Investing.com
Trends in tech job losses
The recent wave of tech layoffs can be attributed to changes in market conditions due to the pandemic and excessive hiring in recent years. Layoffs in the IT sector have been severe in recent years, partly due to changes in consumer behaviour caused by the pandemic, which led to an increased reliance on the internet shopping and remote work.
Businesses such as Meta over-hired in recent years and were forced to lay off 11,000 workers. According to research company Challenger, Gray & Christmas, the US tech sector embarked on a hiring frenzy during the epidemic. It announced 97,171 job cutbacks in 2022, a 649% rise over the previous year.
“We’re already out of the hiring spree of the pandemic years. Businesses are bracing for an economic slowdown by laying off personnel and limiting hiring.”
Andrew Challenger, labor expert and Senior Vice President of Challenger, Gray & Christmas, Inc.
The tech industry is experiencing significant financial pressures due to these factors. These financial pressures have led many businesses to cut costs, which often include layoffs. However, this trend may not affect the quantum computing industry, at least not immediately.
The main motive behind the initial wave of layoffs is unrelated to the quantum computing industry; the quantum computing industry has a smaller talent pool to hire from, so overhiring is perhaps not a major concern. Additionally, given the current level of technology and the specialized nature of quantum computing, customer behaviour is unlikely to impact the industry and force layoffs significantly. Therefore, the initial wave of tech layoffs, primarily driven by pandemic effects, excessive hiring, and market conditions, is unrelated to the quantum computing industry. The only likely reasons for layoffs in this sector are a lack of revenue or funding or the need for restructuring.
While the quantum computing sector may not experience layoffs for the same reasons as other tech companies, such as overhiring or changing market conditions, it is still vulnerable to the effects of widespread tech layoffs. In particular, losses in the tech industry may impact government funding, academic research, and private investment in the quantum computing sector.
Job Losses in the Quantum Computing Industry
While the quantum computing industry is still in its early stages, it has faced its fair share of challenges, including the recent trend of layoffs in the broader tech sector. Despite the enormous promise of this emerging field, many organizations are struggling to manage the complicated, rapidly changing landscape of quantum computing research and development. The layoff pattern includes staff reduction, wage inflation reduction, and the provision of redundancy payoffs to aid the laid-off employees in retraining.
Rigetti Computing is a Berkeley, California-based company that creates quantum integrated circuits for quantum computers. It also develops the Forest Cloud Platform, which allows programmers to build quantum algorithms and gives developers access to quantum computers for testing.
Regetti, like many other recent tech companies, recently laid off a substantial number of its employees. According to hpcwire.com, Rigetti laid off 28 per cent of its workforce in February 2023 with talk of a “quantum winter”. The move was driven by a change in the company’s strategy, as Rigetti disclosed on February 10 that its Board of Directors had adopted an amended business strategy that will see it transition to a newly hired CFO and CTO and concentrate on delivering its 84-qubit Ankaa-1 system, which is presently in development, by the end of the first quarter of 2023.
Its CEO Chad Rigetti stated that the layoffs were part of an effort to streamline operations, allocate resources towards the company’s core goals, and preserve cash resources. The recent losses at Rigetti Computing highlight the impact of financial pressures on the quantum computing industry. As we’ve seen, the company’s losses were driven by the need to focus on core priorities and conserve resources to achieve its goals.
IonQ is a quantum computing hardware and software firm in College Park, Maryland. It specializes in a general-purpose trapped ion quantum computer and software to build, optimize, and execute quantum circuits. The company stated in a report that it believes quantum computing will define the twenty-first century and will have an even more significant impact than classical computing over the last 100 years. It also employs roughly 60 people, including Dave Bacon, who was just hired as head of software and was previously the leader of Google’s quantum software team. The market or stock market has not been kind to IonQ, and that has put pressure on the business, which has only recently gone public. But there are no public job losses at the time of writing.
Other companies such as Microsoft, Google and IBM appear to be continually hiring space, as we see plenty of job adverts. We do not have visibility into any job losses at these firms, so we cannot comment on hiring or firing patterns.
A silver lining to job losses?
Back to research?
- The growing quantum industry will create numerous career opportunities for individuals with specialized quantum training and those with broader STEM backgrounds. As multiple areas of the technology industry experience significant layoffs, the quantum computing industry looks to expand. According to Chris Monroe, a co-founder of Ion Q, The quantum computing sector still has a long way to go. They have an approximate timeline, give or take a few decades. And, for now, their roadmap has at least one major flaw: a shortage of trained personnel. Quantum computer scientists are currently in high demand. As a result, the industry requires a certain level of trained personnel in its workforce expansion.
- Will those leaving the traditional tech sector going into new industries? As the talent gap in quantum technology is vast, intervention from experts in adjacent spaces can begin to fill it. While technology advances, the demand for quantum expertise shifts to software firms and corporations utilising the technology. Leaders from several industries are already assembling quantum teams and testing early-stage algorithms on current quantum systems. This involves investigating how quantum algorithms might improve financial service encryption protocols, optimise logistics routes and fleets, and improve clinical-trial site selection in pharmaceuticals, among other things.
Where to go to learn more about quantum computing? Quantum zeitgeist has seen an uptick in interest in quantum courses; whether this is due to trends or reflected in people looking to retrain is impossible to determine. But upon discussion with ex-Big-Tech employees, we have noticed a trend in upskilling for new tools and technologies, and Quantum is just one such emerging or disruptive technology. And we think the most exciting!
