Mon Feb-5-2024: Tech Layoffs Amidst a Booming Job Market: Contradictions and Concerns

In this episode of "The Business of Tech," host Dave Sobel discusses the contradicting news of layoffs at tech giants Google, Amazon, and Microsoft amidst a booming U.S. job market. He also shares insights on Microsoft's new AI tool for sales and services, specifically designed for Salesforce and Dynamics 365 users. Additionally, Sobel highlights IBM's discovery of the audio jacking threat in voice call security. Sobel also touches on the strong growth of the U.S. labor market, with a substantial increase in jobs added in January and low unemployment rates. However, economists caution that other factors may indicate a potential slowdown in wage or job market growth.

Three things to know today

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[00:00.000 --> 00:29.000] It's Monday, February 5th, 2024, and I'm Dave Sobel, three things to know today. Google, Amazon, and Microsoft layoffs contradict a booming U.S. job market, co-pilot AI for sales and services, Microsoft's new tool for Salesforce and Dynamics 365 users, and IBM uncovers audio-jacking threat in voice call security. This is the Business of Tech. [00:31.000 --> 00:43.000] Today's episode is supported by CoreView. Your customers need your Microsoft 365 expertise, and CoreView has the only M365 management platform designed for MSPs. [00:43.000 --> 00:50.000] Manage hundreds of tenants, automate manual tasks, and monitor compliance, all while intelligently comparing to the baseline. [00:50.000 --> 00:56.000] With a no-code control approach, CoreView revolutionizes your Microsoft 365 administration. [00:56.000 --> 01:03.000] This powerful platform enables automatic reporting and remediation, ensuring optimal performance and security. [01:03.000 --> 01:13.000] The best part, you achieve this high level of service without the need for a large workforce, allowing you to focus on growing your business through efficiency. [01:13.000 --> 01:19.000] Want to know more? Visit coreview.com slash MSP and find out more. [01:20.000 --> 01:23.000] Friday brought the jobs report. [01:23.000 --> 01:35.000] The U.S. labor market shows strong growth with a blockbuster gain of 353,000 jobs in January, and revisions showing 333,000 jobs added in December. [01:35.000 --> 01:44.000] Joblessness remains low, wage growth beats inflation, and unemployment has been below 4% for two years. [01:44.000 --> 01:47.000] The average work week has decreased. [01:47.000 --> 01:54.000] Hourly wages in the U.S. rose 0.6% in January, outpacing inflation and indicating a strong labor market. [01:54.000 --> 02:07.000] Economists caution that the January wage number may be influenced by that decline in hours worked and other signals suggesting a potential slowdown in wage or job market growth. [02:08.000 --> 02:18.000] According to an analysis by CompTIA, the U.S. tech industry's employment grew for the second consecutive month, with nearly 18,000 jobs added in January. [02:18.000 --> 02:26.000] Job postings for future hiring also rebounded with over 392,000 active postings for tech occupations. [02:27.000 --> 02:37.000] The highest demand for tech workers was in professional, scientific, technical, administrative support services, manufacturing, finance and insurance, and information sectors. [02:37.000 --> 02:41.000] However, the Washington Post had a different analysis. [02:41.000 --> 02:52.000] Despite a booming U.S. economy and a strong job market, the tech industry has been experiencing a wave of layoffs, with companies like Google, Amazon, Microsoft, and others letting go thousands of workers. [02:52.000 --> 03:01.000] The layoffs have left the tech workforce feeling despondent and confused as the industry cuts high paid workers to improve profitability. [03:01.000 --> 03:12.000] And in Business Insider, the number of people quitting their jobs in the U.S. fell by 12% last year, which could indicate a lack of confidence in the labor market. [03:12.000 --> 03:19.000] Economists suggest that this trend may lead to slower wage gains and reduced worker bargaining power. [03:20.000 --> 03:28.000] The declining job quits is part of a larger trend called grumpy staying, where workers feel unable to leave their current roles. [03:28.000 --> 03:33.000] Forecasters warn that the unemployment rate could rise as the economy slows down. [03:34.000 --> 03:43.000] And from Axios, contrary to doomsday predictions, the retail sector is thriving, with a low vacancy rate and increasing rents. [03:43.000 --> 03:51.000] Demand for retail space remains strong in 2023, and the retail landscape has evolved to complement e-commerce. [03:51.000 --> 03:59.000] The retail apocalypse never happened, as Americans still enjoy shopping, and brick-and-mortar stores continue to thrive. [03:59.000 --> 04:12.000] Finally, a different kind of market data, according to a survey conducted by Pew Research Center, YouTube is the most widely used social media platform among U.S. adults, followed by Facebook and Instagram. [04:13.000 --> 04:25.000] TikTok has seen significant growth in its user base, and the report also highlights age differences in platform usage, with younger adults more likely to use platforms like Instagram, Snapchat, and TikTok. [04:25.000 --> 04:37.000] Demographic differences in platform usage are also noted, such as higher Instagram usage among Hispanic and Asian adults, and higher LinkedIn usage among those with higher levels of education. [04:38.000 --> 04:44.000] Why do we care? Things look good. It's okay to say that. [04:44.000 --> 04:53.000] As the labor market becomes more competitive, and job openings decrease, employees have less leverage to negotiate better pay or benefits when switching jobs. [04:53.000 --> 04:55.000] That's a statement, not a judgment. [04:55.000 --> 04:58.000] I want to call out the red herring of job cuts. [04:58.000 --> 05:06.000] These big tech cuts come as companies face pressure from investors and cite economic concerns and inflation, which are proving not to be honest. [05:06.000 --> 05:08.000] I don't buy it. [05:08.000 --> 05:16.000] The retail apocalypse hasn't come. In fact, that sector seems to be doing great. Note retail space, not office space. [05:16.000 --> 05:27.000] We're looking for those second-order effects here. Retail industries should be up, related industries should see good conditions, and all are areas to look for opportunities in. [05:27.000 --> 05:34.000] Microsoft has announced the general availability of its AI co-pilot for sales and service. [05:34.000 --> 05:42.000] The co-pilot AI assistant, powered by OpenAI's GPT-4, is now available in two sector-specific versions. [05:42.000 --> 05:54.000] Co-pilot for sales, which connects to Salesforce's Sales Cloud and Microsoft's Dynamics 365 Sales CRM, and Co-pilot for service, designed for call centers and customer service personnel. [05:54.000 --> 06:01.000] Both versions have been well received in preview availability and offer various AI capabilities to enhance productivity. [06:01.000 --> 06:17.000] Pricing for co-pilot for sales starts at $50 per user per month, while co-pilot for service is available for $50 per user per month or $20 per user per month for existing co-pilot for Microsoft 365 users. [06:17.000 --> 06:19.000] Why do we care? [06:19.000 --> 06:23.000] Microsoft is making sure there's a co-pilot for every situation. [06:23.000 --> 06:35.000] You've got work to do if you're building a business around this, and at minimum, you need to keep track of adoption and market fit if you're not embracing the products to at least understand them. [06:35.000 --> 06:45.000] The FCC is proposing to outlaw the use of AI-generated voices in robocalls, making it easier to charge operators of those fraudulent calls. [06:46.000 --> 06:53.000] The use of voice cloning technology, such as using President Biden's voice, would be deemed fundamentally illegal. [06:53.000 --> 07:01.000] This move aims to give state attorneys general offices new tools to crack down on these scams and protect consumers. [07:01.000 --> 07:07.000] The FCC is taking steps to recognize this emerging technology as illegal under existing law. [07:07.000 --> 07:14.000] Similarly, IBM researchers have discovered a method for scammers to hijack voice calls using generative AI tools, [07:14.000 --> 07:22.000] allowing them to impersonate someone's voice and manipulate ongoing conversations to steal funds and sensitive information. [07:22.000 --> 07:31.000] The researchers call this threat audio-jacking, which involves using voice clones to replace certain phrases with a victim's cloned voice. [07:31.000 --> 07:38.000] It poses a significant risk to financial institutions and others who rely on phone calls for identity verification. [07:39.000 --> 07:48.000] The report suggests paraphrasing and repeating what was said to verify accuracy and trip up the chatbots used in these scams. [07:48.000 --> 07:56.000] And from Politico, conservatives, tech lobbyists, and GOP lawmakers are opposing President Joe Biden's executive order on AI, [07:56.000 --> 08:04.000] which uses emergency powers to compel tech companies to provide information to the Commerce Department about advanced AI projects. [08:04.000 --> 08:12.000] Critics argue that using the Defense Production Act to regulate AI is an executive overreach and not with the law intended. [08:12.000 --> 08:15.000] I was also taken with this dual use of copyright law. [08:15.000 --> 08:24.000] Meta, formerly known as Facebook, used copyright law to protect its llama AI model while arguing against the same protections for others. [08:24.000 --> 08:32.000] The company believes that online content used for free to build AI models falls under fair use, except for its content. [08:32.000 --> 08:40.000] That is attempt to have a leaked version of llama removed from GitHub failed as the model specifications were deemed not copyrightable. [08:40.000 --> 08:47.000] Other big tech companies, including Microsoft and Apple, argue for copyright protection for their AI models outputs, [08:47.000 --> 08:52.000] while claiming that the copyrighted inputs used to train the models cannot be protected. [08:52.000 --> 08:55.000] Why do we care? [08:55.000 --> 09:03.000] The pushback highlights the broader political disagreements over the regulation of private enterprise, potential impact of safety and around AI, [09:03.000 --> 09:05.000] and the technology's growth. [09:05.000 --> 09:12.000] I think the executive order is smart and would challenge lawmakers to propose some bills of their own if they disagree. [09:12.000 --> 09:17.000] Because companies certainly use the laws on the books, however they see fit. [09:17.000 --> 09:22.000] Robocalls are a scourge, and AI will make the entire thing worse. [09:22.000 --> 09:26.000] I'm encouraged to see some action. [09:26.000 --> 09:28.000] Thanks for listening. [09:28.000 --> 09:30.000] It's National Chocolate Fund Due Day. [09:30.000 --> 09:34.000] It's also World in the Tele Day, so that's a lot of chocolate. [09:34.000 --> 09:36.000] Got a comment, a question, a thought on a story? [09:36.000 --> 09:41.000] Put it in the comments if you're on YouTube, or reach out on LinkedIn if you're listening to the podcast. [09:41.000 --> 09:44.000] I'll talk to you again tomorrow. [09:45.000 --> 09:52.000] The Business of Tech is written and produced by me, Dave Sobel, under ethics guidelines, posted at businessof.tech. [09:52.000 --> 09:57.000] If you like the content, please make sure to hit that like button and follow or subscribe. [09:57.000 --> 10:02.000] It's free and easy, and the best way to support the show and help us grow. [10:02.000 --> 10:08.000] You can also check out our Patreon, where you can join the Business of Tech community at patreon.com [10:08.000 --> 10:15.000] slash MSP radio, or buy our Why Do We Care merch at businessof.tech. [10:15.000 --> 10:22.000] Finally, if you're interested in advertising on this show, visit MSPradio.com slash engage. [10:22.000 --> 10:24.000] Once again, thanks for listening to me. [10:24.000 --> 10:29.000] I will talk to you again on our next episode of the Business of Tech. [10:31.000 --> 10:34.000] Part of the MSP Radio Network. Transcription results written to '/home/forge/transcribe3.sonicengage.com/releases/20240205231104' directory