Sigma Software Group CEO Valeriy Krasovsky believes that the hype around layoffs due to AI is greatly exaggerated, because most large global technology companies in previous periods hired many times more people than they laid off.
Sigma Software Group CEO Valeriy Krasovsky believes that the hype around layoffs due to AI is greatly exaggerated, because most large global technology companies in previous periods hired many times more people than they laid off.
Despite this, as Krasovsky says, it is the news about employee layoffs that makes the headlines.
“What we are seeing is not yet an AI revolution or a crisis. A small correction. 128,000 is a beautiful and scary number for a headline, but against the background of a million people hired during Covid and a doubling of revenue, it means nothing. Companies are cutting 3% of their staff — the tail end of the 2021 rehiring — and signing it with the word “AI,” because it sounds more modern than “we went too far”… While someone is cutting 3% and talking about AI transformation, he is simply covering up the 2021 rehiring with a buzzword,” Krasovsky wrote on his Facebook page.
He analyzed that the 16 largest global brands, including a number of technology companies, collectively laid off 128,000 employees, but their combined revenue has increased by 142% since 2019, and their staff has grown by 85%, while only 3% have been laid off.
Among the technology companies that Krasovsky mentioned in this context are Amazon, Microsoft, Meta, Oracle, and others. He did a brief analysis for each of them, which shows that hiring in previous years was many times higher than the current layoffs.
Krasovsky separately gave the example of Oracle.
“Look at Oracle: they hired the least, revenue grew the least, and they are cutting the most. It’s not that AI replaced people. It’s a company with $500 billion in AI contracts in the backlog that is consciously transferring money from salaries to data centers. They are the only ones on the list who don’t hide behind the word "efficiency" — they simply do what is necessary for growth,” the IT businessman stated.
He urged the IT community to analyze headcount and revenue per employee first, rather than paying attention to big headlines.
As dev.ua previously wrote, AI-related layoffs could be costly in the future, as almost a third of those laid off will have to be hired again by 2029 — but at a higher price.
