Published in AI

Big Tech lay-offs are already costing them

by on25 April 2023

19th-century staff management approaches don’t work

Faced with falling margins after the Covid bubble burst, Big Tech let thousands of staff go on the assumption that they could rehire them when things got better at the end of the year, but they might have miscalculated, according an Intuit boss.

Intuit CEO Sasan Goodarzi said that employment instability at the major tech firms is making it easier to poach star talent even when they still have jobs.

Goodarzi told Insider that it made the Big Tech layoffs made it easier for him to head hunt AI skilled staff and pick up staff who would remain loyal to companies.

"Looking back over the past six or seven months, it's been far easier to find that type of talent — data and AI have been core to our strategy," he added. "When we talk to engineers that understand AI, they see our investments, it's easier."

Alphabet, Meta, Microsoft, and Amazon have conducted large-scale layoffs since the end of 2022, affecting around 70,000 workers collectively as they refocus on efficiency and profitability.

Goodarzi added that the uncertain environment is such that "it's just easier to recruit folks that still have jobs."

Intuit had 17,300 employees, as of July last year, according to financial filings, up from 13,500 the prior year.

It has still made money too. For its fiscal Q2, Intuit reported net income of $168 million, up yearly from $100 million, on revenues of $3 billion, up year-on-year from $2.7 billion.

The issue is that the old 19th-century approach of keeping shareholders happy during “economic headwinds” by firing staff for a year and going on a recruiting drive when things get better is poor imagination. What you should be doing is using the extra staff to develop new products and keeping them sweet so that they don’t fall into the hands of more sensible rivals.


Last modified on 25 April 2023
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