Technology companies are slashing jobs at an alarming rate in the post-pandemic economy. Famed stock picker and ARK Invest CEO Cathie Wood argued that these layoffs should not be viewed as a sign the industry is in “disarray.”
“We don’t think this is the technology sector in some kind of disarray or sunsetting in some way or the opposite. We think they’re harnessing new AI tools and other technologies to increase productivity and provide new products and services,” Wood said on “Mornings with Maria” Thursday.
Wood argued that tech companies are utilizing layoffs to correct over-hiring during the height of the pandemic when productivity was a major concern. More significantly, she explained the layoffs may be more closely associated with new opportunities presented by artificial intelligence (A.I.).
“Many of these technology companies had had to gear up to handle COVID, and they did a beautiful job. I mean, Zoom, what it did, going from 20 million users to 200 million users in a year to 18 months, the technology to accommodate that, being able to do that was probably one of the greatest technology feats we’ve seen in quite some time,” she said.
“Of course, now we’re seeing the opportunity with A.I. for productivity gains. That’s one of the primary opportunities associated with A.I. for traditional companies. And so we think companies need to increase their productivity, and maybe they went a little bit too far hiring as they were trying to address all the needs that COVID presented.”
More than 300 technology firms have seen layoffs in 2023, and according to recent data from Layoffs.fyi, nearly 100,000 jobs have been cut since the start of the year. These companies include Amazon, Apple, Zoom, Dell and IBM.
Google, Meta, Microsoft and Amazon top the list with at least 10,000 layoffs year to date.
Wood outlined how A.I. is playing a role in the layoffs as it provides new avenues for amplifying productivity. Last week, Wood even cast the prediction that by 2030 Amazon will have more robotic employees than humans.
“Amazon is adding about a thousand robots a day,” the Ark Invest CEO told CNBC Wednesday.
“If you compare the number of robots Amazon has to the number of employees, it’s about a third. And we believe that by the year 2030, Amazon can have more robots than employees.”
As of 2022, Amazon peaked at roughly 1.6 million employees, although recent layoffs have affected that number. In contrast, Amazon currently has more than 520,000 robots in use as of mid-2022.
Wood went on to say that the world is “at the dawn of the robotics age,” with innovations such as artificial intelligence and battery technology also contributing to the developments.
Despite the massive layoffs, Wood expects that innovations will transform and expand opportunities for the tech industry utilizing the new technologies.