Is the tech boom tapering off?

Some of the big tech firms like Google are cutting jobs. Can the tech boom continue into 2024?

- Lee Su Shyan Associate Editor Senior Columnist

Earlier in January 2024, Lazada, a unit of New York Stock Exchangelisted Alibaba, announced plans to reduce its headcount. The ecommerce arm Lazada operates in various countries across Southeast Asia, including Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

Layoffs affected all functions, reports said. A CNBC report had put the cuts in the region of hundreds.

Subsequently, Google also announced job cuts. These were in areas such as the hardware and central engineering teams, as well as Google Assistant. Some estimates put the number affected at 1,000, with more layoffs expected this year.

So is this a signal that these tech firms are in trouble? Analysts reckon it is more to do with strategy and re-organisation than a lack of growth prospects.

Insead's associate professor of entrepreneurship and family enterprise Jason Davis believes that "these job cuts may be a sign of adaptability and strength, not weakness". He says tech firms are highly successful and dynamic organisations that need to adjust the workforce occasionally to capture opportunities.

One factor is that these companies ramped up hiring dramatically during the Covid-19 pandemic, often in remote-focused roles, and they have been readjusting back towards a balance in the number of in-person workers since the pandemic ended.

Another factor is that companies are facing a massive technological revolution in the next five years around artificial intelligence (AI) and, to capture that opportunity, many of them will need to focus headcount on those with AI expertise.