After the bad start of 2024 for the stock market and with that some companies, massive layoffs are happening now at some companies. The biggest companies to report layoffs are Unity, Duolingo, Blackrock, Amazon and Google. These layoffs are due to the companies situation and the changing situation in different industries. Some are also results of the fast development of AI.
The layoffs at Unity
After the company faced big losses already in last years, they already cut off jobs multiple times. The stock also experiences a significant low point right now. As it is down about 8 to 10% from January 10. until now, January 12. The share is now at a price of $38.74 from their all time high of $201.12 in November 2021.
After they suffered losses earlier, they introduced a paid version of their game store. With that you would have to pay up to $1.900 per user per year if you are a big video game studio. The app only is free if you generate a maximum revenue of $100.000. If you between that and $200.000 you’ll have to pay $399 per user per year. On top of that the company makes developers pay $15 to $20 per installed game after they hit 200.000 installations. Another fee that was introduced is that companies that have more than $1 million in revenue get to choose if they want to pay the per-user fee or a 2.5% revenue share.
All these pricings left developers and investors concerned if the company is actually that good of an investment. Developers also lost their faith into the game engine company. And now due to financial performance last year the company will layoff 1,800 employees again which is about 25% of it’s workforce.
The recent Duolingo layoffs
Duolingo cut about 10% of their staff due to AI. The company is the latest one to release staff because of AI. The company will have the translations done by Chat-GPT 4 and just some employees will look over the translations said the company. There are many people that translate the words but it is actually a lot cheaper for the company to just have Chat-GPT do it.
Their share price did not move much because of that so it did not have a big impact on the company. According to the World Economic Forum’s, AI will transform 23% of jobs in the next five years.
The company also announced that they will release a Chatbot called “Max” that you can access for a paid subscription. It will cost $29.99per month or $167.99 per year. With that you will be able to unlock two AI-powered features called “Roleplay” and “Explain my answer”. These two features will help to understand your mistakes a lot better and learn faster. It will be interesting to see how many people will be interested in these AI-powered features.
BlackRock laid off 3% of their global workforce
BlackRock will dismiss 600 employees which is 3% of it’s global workforce. Reasons for that is the constantly and faster changing industry of asset management. The CEO Larry Fink and President Rob Kapito said in a memo to the staff, that “we see our industry changing faster than at any time since the founding of BlackRock.”
They also said that the industry prefers ETFs for index- and active-investment strategies, and that the firm is growing across the globe. This includes especially Europe and Asia. The CEO and President are optimistic for the future but the company needs a change right now they said. This is to adapt to the fast changing industry.
The company expects to have more staff by the end of the year than before the cuts. This happens as the company wants to expand certain parts of their businesses and for that they need a lot of employees.
BlackRock is one of the biggest money managers including Wellington Management and T. Rowe Price Group Inc. They cut jobs recently as well and redirected budgets in response. BlackRock wants to position itself as a company for investors that offers equity, bond and money-market funds and strategies for private assets. Moreover they want to provide tech, data, analytics and financial markets advice to clients. The company also wants to expand into the growing market and plans to double the revenue coming from private markets over the next five years.
Layoffs at Google
Google, the company of Alphabet Inc. is laying off hundreds of employees that worked on digital assistant, hardware and engineering teams. This is to lower costs and focus on the development of their Artificial Intelligence. The company said that they want to invest in bigger priorities now so they need to lower costs a lot.
The company let go of 630 workers including four vice presidents and 25 directors. This will leave the company a lot of money for now, since these position usually pay millions of dollars per year. They also let go of the co-founders of Fitbit, James Park and Eric Friedman. Google acquired the company that produced smartwatches in 2019 for $2.1 billion. The cuts are after the company announced earlier that it will cut about 12.000 jobs which is more than 6% of the global workforce.
Google said that it plans more layoffs in January. This leaves employees of the company concerned. As of September 30, the company had 182.000 employees.
Amazon is laying off staff as well
The company is laying off “several hundreds” in its Amazon Prime Video and Amazon MGM Studio divisions. The company said that it wants to focus on the development of the Amazon and needs to reduce investments in certain areas. Their investments are focused on content and product initiatives that deliver the most impact.
The employees that are affected will be notified by the end of the week the company said. These cuts are following several rounds of layoffs in 2022 and 2023 by Amazon. These already affected more than 27.000 people.
Same day as the layoffs at Amazon, the company also announced layoffs at Twitch. Twitch is also owned by Amazon and in eliminating 35% of its workforce which is more than 500 roles. The CEO Dan Clancy said to the staff in a memo that the livestreaming platform “is still meaningfully larger than it needs to be”. These cuts are related to the expectations of Amazon for Twitch and how it will develop in the future.
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