It’s not AI: Mark Zuckerberg explains renewed layoffs in tech

With the tech industry continuing layoffs in 2024, Meta CEO Mark Zuckerberg says that the rise of artificial intelligence has nothing to do with it.

It’s been a brutal two years for employees in the tech sector, which has shed more than 450,000 jobs in that time, including around 40,000 layoffs at nearly 150 companies in the first six weeks of 2024 alone.

Might this be the fault of accelerating automation? McKinsey, a global strategy and management consultancy, certainly thinks so. Last year, it estimated that AI could replace 12 million more workers by 2030.

On the Morning Brew Daily podcast, though, Zuckerberg said the mass layoffs started as a result of companies trying to get back to efficiency after the e-commerce boom seen during the COVID-19 pandemic. Now, after the surge, firms are realizing that they need to be leaner.

With regards to Meta specifically, Zuckerberg said: “The AI stuff was not a major driver of that.”

According to the billionaire, employers are still in the process of readjusting because they “overbuilt” during the pandemic to meet the extra demand. People have since returned to physical shopping, and the problem of overstaffing has emerged.

“In terms of the layoffs and stuff like that, I actually think that was more due to companies trying to navigate COVID and the pandemic. It was sort of this weird wave where, at first, we saw e-commerce go through the roof. But it was really hard to predict, is that going to continue?” said Zuckerberg.

“I think across the economy, a lot of companies just kind of overbuilt. And then when things went back to pretty close exactly the way they were before it, I think a lot of companies realized, hey, we’re kind of not in a good financial place.”

In 2023, Meta laid off tens of thousands of workers across various teams. These cuts followed an earlier reduction of 11,000 jobs in November 2022 by the company, which owns Facebook, Instagram, and WhatsApp.

“It was obviously really tough. We parted with a lot of talented people we cared about. But in some ways, actually becoming leaner kind of makes the companies more effective,” said Zuckerberg.

Experts previously told Cybernews that a certain amount of rebalancing is definitely taking place with the advent of generative AI. However, even if some workers are losing their roles, generative-AI-related job posts have actually been increasing – and employees who lose jobs are quickly hired for other types of jobs.

In other words, the tech sector is still looking quite healthy. Zuckerberg concurs: Meta’s stock recently reached an all-time high after he said the company was committing to a “leaner” operating structure and slow hiring.