Meta, Intuit lay announce thousands of layoffs
Meta, Intuit lay off thousands of workers
The Bay Area tech sector faced a fresh wave of disruption Wednesday as Meta and Mountain View-based software company, Intuit, announced thousands of layoffs, adding to a growing list of major companies slashing their workforces amid rapid shifts in the industry.
MENLO PARK, Calif. - The Bay Area tech sector faced a fresh wave of disruption Wednesday as Meta and Mountain View-based software company, Intuit, announced thousands of layoffs, adding to a growing list of major companies slashing their workforces amid rapid shifts in the industry.
11,000 employees
About 8,000 Meta employees received official notice Wednesday that they are out of a job, the same day Mountain View-based Intuit announced it would eliminate 3,000 positions — roughly 17% of its workforce — by July 31.
Intuit, the software company best known for TurboTax and QuickBooks, said it would also shut down satellite offices in Reno and Woodland Hills as part of what the company described as a move to streamline operations. Affected employees will be notified by the end of July, with their last day set for July 31. The company said it is offering a minimum of 16 weeks of severance pay.
Meta layoffs take effect
Last month, Meta executives announced the company planned to shed about 10% of its global workforce to improve efficiency and offset the cost of $125 billion in AI investments. Wednesday was the day those cuts formally landed for affected workers.
Meta said the 8,000 employees being laid off will receive at least 16 weeks of severance pay. About 7,000 Meta employees not affected by the layoffs will be reassigned to work on AI projects at the company.
Reuters also reported last month that Meta installed tracking software on employees' work computers to capture mouse movements, clicks and keyboard shortcuts — data the company intends to use to train its AI systems to better perform tasks currently done by human workers.
A growing list of tech layoffs
The two Bay Area companies are not alone. Microsoft, Block, Coinbase, and Pinterest are among the other companies that have announced plans for mass layoffs in recent months.
Jeff Bellisario, executive director of the Bay Area Economic Institute, said the region is navigating a difficult but not unprecedented transition.
"The AI disruption is real. It's happening to people, it's happening in companies, but the AI opportunity is also real," Bellisario said. "You're seeing that in San Francisco, you're seeing that along the peninsula as new companies pop up and new people are employed here. I do think we're in this balancing act right now."
Bellisario pointed to some encouraging signs in the local economy, including rising home and rental prices and a recovery in the commercial office market.
"If you look at San Francisco in particular, the first quarter was very, very near pre-pandemic levels of office demand and net absorption of office space," he said. "And as long as companies are taking space, that tends to be a good sign. Companies usually don't take space to keep it empty."
Debate over AI's role in the cuts
Not everyone agrees that AI is the primary driver of the layoffs.
Chris Markowski, founder of the financial advisory firm Watchdog on Wall Street, argued that companies share some of the responsibility for the current wave of cuts, pointing to their own management decisions in recent years.
Business attorney and analyst Parag Amin said the trend of large tech companies using AI as a justification for workforce reductions is unlikely to slow down.
"Companies such as Meta are looking at the real possibility" of using AI to replace human labor, Amin said, adding that "it's a trend we'll continue to see increase in the future."
Whether the Bay Area economy can absorb the shock of these layoffs — while simultaneously capitalizing on the opportunities created by AI investment — remains an open question, Bellisario said.