The summer of tech layoffs doesn’t seem to be coming to an end.
Almost 200 Seattle-area tech workers were laid off this week in waves of workforce reductions from business-software maker Salesforce and cloud computing giant Oracle.
San Francisco-based Salesforce let go of 93 employees between its Seattle and Bellevue offices, the company disclosed in a state regulatory filing Wednesday. On Tuesday, Austin, Texas-based Oracle laid off 101 workers in Seattle.
The layoffs this week aren’t isolated incidents. The broader tech workforce has been slammed by repeated cuts throughout the year with tech behemoths Amazon and Microsoft joining the trend. Local companies like cybersecurity firm F5 and telecom giant T-Mobile have also announced layoffs over the past few months.
Many of the companies have justified the cuts by expressing the need for a streamlined workforce and vaguely gesturing to the hiring boom during the pandemic. Looming over much of the job turmoil in the industry is Big Tech’s newest obsession: artificial intelligence
For some companies, the pressure comes from AI costs. Microsoft, which has laid off more than 15,000 employees globally since May, spent more than $80 billion over the past year building out its AI infrastructure. Microsoft plans to up its quarterly spending on the technology over the next few months.
The company said workers aren’t being replaced by AI. Microsoft President Brad Smith told GeekWire in July that those investments are creating pressure on the company’s margins, leading to cost-cutting.
But Salesforce says the AI technology it’s adopting is replacing workers. CEO Marc Benioff said last week that the company was able to shrink its support roles by 4,000 as AI automates tasks.
Salesforce did not respond to a request for comment on whether the layoffs in Seattle and Bellevue were a result of automation.
Amazon, which reportedly laid off hundreds of workers in July, pointed to the same reason Microsoft did. The company said it was reviewing areas of the business that can be trimmed in a bid for efficiency.
But the company has hinted at a more automated future with fewer corporate jobs. Amazon CEO Andy Jassy said in a June memo to employees that as AI spreads throughout the company, there will be fewer people needed to do current jobs with more people doing other types of jobs.
“It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company,” he said.
With Salesforce’s layoffs, more than 4,170 Seattle-area employees have been let go from a tech company this year, according to state regulatory filings. Over 3,100 were Microsoft workers.
Salesforce released third-quarter financial results Wednesday as well. The company reported more than $10.2 billion in revenue, up from $9.33 billion in the same quarter a year ago. Profit grew to $1.89 billion from $1.43 billion last year. Both beat Wall Street estimates.
The stock price fell more than 5% in after-hours trading after Salesforce projected its revenue for the current quarter to come in below analysts’ expectations.
