Zuma Global President Heather Zumarraga reacts to a recent report revealing that tech companies have cut 32,500 jobs in 2024 on ‘The Big Money Show.’
Meta CEO Mark Zuckerberg said the layoffs that are hitting the tech industry aren’t due to the growth of artificial intelligence.
It started as the result of companies trying to navigate the e-commerce boom during the COVID-19 pandemic. Now, they’re realizing they can be more efficient as a leaner organization, Zuckerberg said during a conversation on the Morning Brew Daily podcast.
Specifically for Meta, Zuckerberg said, “The AI stuff was not a major driver of that.”
LAYOFFS SURGED 136% IN JANUARY TO SECOND-HIGHEST LEVEL ON RECORD
When e-commerce started to surge during the pandemic, Zuckerberg said it was hard to predict if this was going to continue.
What happened, he said, was that companies “overbuilt.”
Facebook CEO Mark Zuckerberg speaks about the new Facebook News feature at the Paley Center For Media on October 25, 2019 in New York City. (Drew Angerer/Getty Images / Getty Images)
Meta was one of them. In November 2022, Zuckerberg announced that the company was laying off more than 11,000 workers to become leaner after making significant investments during the surge of e-commerce. The company cut another 10,000 roles last spring.
LAYOFFS SKYROCKETING IN 2024: HERE ARE THE COMPANIES AXING JOBS
But Meta was only one of several major tech firms that had layoffs, including Alphabet, Amazon and Microsoft, throughout the past year, with many companies saying they over-hired.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| META | META PLATFORMS INC. | 473.32 | -10.71 | -2.21% |
| AMZN | AMAZON.COM INC. | 169.51 | -0.29 | -0.17% |
| MSFT | MICROSOFT CORP. | 404.06 | -2.50 | -0.61% |
| GOOGL | ALPHABET INC. | 140.52 | -2.25 | -1.58% |
“I think across the economy, a lot of companies just kind of overbuilt, and then when things went back to pretty close to exactly what they were the way before… I think a lot of companies realized, ‘Hey, we’re kind of not in a good financial place because we overbuilt,'” Zuckerberg told hosts Neal Freyman and Toby Howell.
Meta CEO Mark Zuckerberg speaks about Messenger at Facebook Inc’s annual F8 developers conference in San Jose, California, U.S. May 1, 2018. (REUTERS/Stephen Lam / Reuters Photos)
As a result, “you had this wave of layoffs that were basically responding to that,” he continued.
At the same time, the chief executive said there was a “generation of companies that knew nothing except growth.” But after forcibly having to make cuts, a lot of companies realized they had become more effective as a leaner organization, he said.
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Today, a lot of companies are still in this mode of thinking of “how lean and efficient we should be… maybe we should be in a somewhat different shape than we are now to do the best work that we can.”
In January, companies planned 82,307 job cuts, a 136% increase from the previous month, according to a report published by Challenger, Gray & Christmas. It was also the second-highest layoff total for the month of January since 2009.
It’s impacting workers from a variety of sectors including tech, media and Wall Street.
