Microsoft joined its CX rivals Google and Amazon in laying off thousands of employees.
Unfortunately, the trend extends further into the CX space, also impacting the likes of Salesforce, Oracle, Cisco, and many others.
Indeed, after only three weeks of 2023, more than 150 tech companies laid off over 55,000 employees – as per Layoffs.fyi.
The most prominent cause seems to be that these vendors overinvested in their growth as new opportunities presented themselves during the pandemic.
However, the war in Ukraine, the resulting energy crisis, and economic uncertainty threw an almighty spanner in the works.
Nevertheless, stalwart vendors also seem to be seizing the chance to restructure their businesses.
After all, despite the tricky economy, enterprise IT spending remains "strong" and "recession-proof", according to John-David Lovelock, VP Analyst at Gartner.
His research also suggests that enterprise spending on software and IT services will grow by 9.3 and 5.5 percent, respectively, in 2023.
So, perhaps businesses are not only making layoffs out of economic necessity. Instead, a change of strategy may be afoot for many.
As such, let's reconsider the layoffs at Microsoft, Google, and AWS, questioning: how might the gameplan change in 2023 and beyond?
Microsoft Steps Back from the Metaverse
Microsoft has committed to culling 10,000 more jobs before July. The move will cut its workforce by almost five percent.
Making the announcement last week, Satya Nadella, Chairman and CEO of Microsoft, stated in a blog post:
“These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn’t adapt to platform shifts.” - BLOCK
Nadella also revealed that Microsoft will take a $1.2BN hit in costs. While redundancies will drive much of this, the total includes lease consolidation fees and expenses related to changes in its hardware portfolio.
Many further details have come to light since the statement. These suggest that Microsoft will dial back its focus on immersive experiences.
Indeed, it is shutting down AltspaceVR, a business it acquired in 2017.
We have some sad news, Altspacers. #AltspaceVR is shutting down on March 10th.
Though we hate saying goodbye, we also feel such pride and gratitude for all the magic that happened here. ✨
Thanks for joining us on this epic adventure. #socialvr https://t.co/peCwpaaBl3
— AltspaceVR (@AltspaceVR) January 20, 2023
While some have pegged Microsoft Mesh as its successor, Microsoft also let the team behind its Mixed Reality Tool Kit (MRTK) go, further fanning the flames of such speculation.
Yet, perhaps this is only a short term. Dave Michels, Lead Analyst at TalkingPointz.com, seems to think so, making a bold prediction for the future. On LinkedIn, he stated:
“I think MS (Microsoft) is now just planning to buy Meta in the next five years as Zuck (Mark Zuckerberg) is so effectively dropping its valuation. - BLOCK
“Microsoft already got free access to Meta’s labs and research. Why internally fund it?”
While this prediction may seem a little eccentric, Nadella has enthusiastically promoted the metaverse during many event speeches in recent years. So, perhaps anything is possible?
Google Prioritizes AI and Search Engine Domination
Google has greenlighted plans to eliminate 12,000 jobs in a bid to “sharpen” its focus. This represents a six percent reduction in its workforce.
The layoffs will cut across continents, product areas, and job levels. Yet, its in-house R&D division, known as "Area 120", appears to be the worst hit.