The Big Tech Layoffs Keep Coming. Watch META, GOOG, AMZN and MSFT Carefully.

24/7 Wall St. Key Points:

• Major tech companies like Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Meta (NASDAQ: META) have laid off tens of thousands of employees despite strong earnings, signaling a shift in workforce needs.
• The rise of AI is accelerating job cuts, particularly for mid-level coders, as automation reduces the need for highly trained software engineers.
• Weak forward guidance from big tech firms suggests more layoffs could come, as companies seek efficiency and margin improvements in a slowing economy.
• Nvidia (Nasdaq: NVDA) generated incredible wealth for early investors, and even $1,000 in ‘The Next Nvidia Stocks’ could do the same. The recent pull back may be the best opportunity to load up investors will get. Click here to see the stocks now (it’s free).

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Transcript:

[00:00:04] Doug McIntyre: You would think the tech industry was doing well if you looked at the stock prices until recently, earnings, tech earnings for the most part have been above average, but they, for some reason, they’re shedding employees,

[00:00:18] Lee Jackson: If you think it’s bad to get rid of government waste fast, what about people that are engineers and coders and guys like that?

[00:00:26] Lee Jackson: And Amazon has laid off 27,000. I’m pretty sure there’s never 27,000 people since 2022. I read it. That’s in three years, but that’s a ton of their workforce. And there’s been big cuts at Meta. there was big cuts at, Microsoft, but they laid off a good chunk of people. And so it makes you wonder if things are going so good.

[00:00:50] Lee Jackson: Why are they? Are they having these big layoffs? And clearly it’s because products paid. And ideas.

[00:00:56] Doug McIntyre: I think that’s part of it. I don’t think that we’ve hit what I would describe as the A.I. transition. There will be a point. I don’t think it’s in the distant future where people will be able to do sophisticated coding without being highly, highly trained software engineers.

[00:01:15] Doug McIntyre: I can see sort of the mid level coder at some of these Yeah. companies, I can see those jobs starting to consolidate and being taken over by people who maybe don’t have a PhD from Stanford, but can use, artificial intelligence to do programming people that listen, people who don’t know how to code are already using artificial intelligence.

[00:01:38] Doug McIntyre: That’s true. That’s absolutely true. Yeah. So if you want to look for efficiency in tech companies, and you want to see costs go down, particularly if their revenues keep moving up, you want to see better earnings, look for layoffs that are driven by things like AI, because I hate to say it, but those people are going to become redundant.

[00:01:59] Lee Jackson: Well, they are. And super duper complex AI for maybe blackout security, not so much. But yeah, for everyday tasks that require coding, which is everything in e commerce, you name it, it’s every single thing. And yeah, if you can easily do that with a solid AI product, why pay some guy, 200,000 bucks a year to come in and code that?

[00:02:26] Lee Jackson: And, often the layoffs will come from parts of the company that, that like when we were talking at one point earlier in Skype, well, there was probably people working there, they’ll get laid off. Skype’s going to the garbage can. But so I think it’s a combination of each, but you’re right.

[00:02:43] Lee Jackson: But they don’t have any problem paying themselves a big bonus, but the 5,000 people out the door didn’t get that bonus.

[00:02:50] Doug McIntyre: Well, I keep an eye open on this. I think you will see a lot more tech layoffs. I think if the economy gets soft, that’ll be one of the reasons though. But. AI will start to take its toll on these mid level tech jobs.

[00:03:05] Doug McIntyre: As you said, the guys who run these companies, they have no qualms about cutting staff and paying themselves well. Most of them are already billionaires. I mean, if you’re an investor, you hate to make money from the suffering of others, but laying these people off and replacing them with basically something that does not need a human at all.

[00:03:28] Doug McIntyre: So ultimately, it’s good for earnings.

[00:03:30] Lee Jackson: Yeah, and, those people, some of those that are forced to leave a major, huge tech company, maybe they go to an AI company, who knows? I mean, those people, a lot of them have transferable skills, they just may need to find another company where they could use those skills.

[00:03:46] Lee Jackson: But yeah, I think you’re going to continue to see layoffs because a lot of these big tech companies like Apple and Meta and the like and Amazon, Google (NASDAQ: GOOG). They have literally hundreds of thousands of people, spread out all over the world. And so they try to consolidate things. And, earnings for the tech, for big tech, for Q4 were, okay.

[00:04:08] Lee Jackson: But a lot of the guidance wasn’t that okay. And that’s part of the reason the stock market’s, kind of buckling a little under the pressure of the current selling. Because, going forward, I think they’re anticipating that with layoffs.

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