Key Takeaways
\nBooming AI demand this week sent Oracle’s stock to a record high not long after reports that the computing giant laid off hundreds of workers.\u00a0Several other tech giants like Microsoft and Amazon have recently cut jobs to lower costs while spending billions on AI expansion.Amazon CEO Andy Jassy has told employees that Amazon expects to operate with a smaller headcount in the coming years as AI advances.<\/p>\n
When business is surging, companies often expand their workforces to handle demand. That’s not what’s happening lately at some of America’s biggest tech companies.\n<\/p>\n
Oracle’s (ORCL<\/a>) booming AI-driven backlog<\/a> sent its stock to a record high this week<\/a>\u2014just weeks after reports the computing giant laid off hundreds of workers as part of an effort curb costs. Several other tech giants, including Microsoft<\/a> (MSFT<\/a>), Amazon<\/a> (AMZN<\/a>), and Google parent Alphabet<\/a> (GOOGL<\/a>), have shed jobs<\/a> recently even as their revenues rose. (Oracle did not respond to a request for comment on the layoffs in time for publication.)\n<\/p>\n The tech sector has been one of the heaviest hit by layoffs so far this year, second only to government jobs, according to a report from Challenger, Gray, and Christmas. And many of the industry’s biggest companies are cutting from a large base: Data from online job board Indeed shows that listings for tech jobs peaked in 2022, outpacing the growth of available jobs in the economy at large, but that trend has reversed.\n<\/p>\n Leading tech firms are trimming their ranks as demand for their services grows. Their swelling spending on AI data centers and hardware from chipmakers like Nvidia (NVDA<\/a>) is one contributing factor, according to Wall Street analysts.\n<\/p>\n AI expenditures are pushing tech leaders to cut costs elsewhere, D.A. Davidson analyst Gil Luria has previously told Investopedia<\/a>, driving many to cut staff or slow hiring to relieve pressure on profit margins. Some, he said, also expect to need fewer workers because of the technology.\n<\/p>\n