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Can Africa avoid fallout of global tech job loss?

Satya Nadella, CEO of Microsoft.
Satya Nadella, CEO of Microsoft.

Microsoft is the latest technology firm to announce job cuts, as tough economic conditions take their toll on business across many global markets.

According to an ITWeb report, Microsoft CEO Satya Nadella yesterday notified employees of the company’s decision to lay off 10 000 staff.

Microsoft has referred media to an official blog by the CEO and says it will not comment further on the matter.

The blog reads in part: “We’re living through times of significant change, and as I meet with customers and partners, a few things are clear. First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less. We’re also seeing organisations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one. At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform.”

“These decisions are difficult, but necessary. They are especially difficult because they impact people and people’s lives – our colleagues and friends. We are committed to ensuring all those whose roles are eliminated have our full support during these transitions. U.S.-benefit-eligible employees will receive a variety of benefits, including above-market severance pay, continuing healthcare coverage for six months, continued vesting of stock awards for six months, career transition services, and 60 days’ notice prior to termination, regardless of whether such notice is legally required. Benefits for employees outside the U.S. will align with the employment laws in each country.”

The announcement comes just two weeks after Amazon divulged plans to retrench over 18,000 employees, mostly from the company’s stores and its People Experience and Technology (PXT) divisions.

Job security and the stability of global tech industries has come under the spotlight, especially after Elon Musk made global headlines in November last year after saying he would have to slash half of Twitter’s workforce.

ITWeb Africa reported that Musk’s decision meant a shutdown of the company’s regional office in Ghana, opened in April 2021.

Concerning but understandable

Africa analyst and scenario strategist Koffi Kouakou says the situation, while concerning, is understandable because of the “a bloodbath of layoffs generally” as international economies remain under pressure.

“In the current capitalist society, as soon as overall economies slow down, they tend to cut down on employees and restructure very quickly because they have to make money. With what we’ve been reading so far about layoffs in tech companies, close to 150 000 were laid off in 2022 and it seems to be continuing now in January 2023… Microsoft, it’s about 11,000…so the numbers are preliminary, but will grow.”

Kouakou adds that the Ukraine/ Russia war has an impact on economies and commerce, including oil, and people are stressed, which translates to uncertainty and an increase in inflation.

He says, “What happens globally has a butterfly effect in Africa. I am hearing and reading that in Kenya, tech companies are laying off… start-up Sendy is cutting 10% of workforce, in Nigeria two start-ups are laying people off - one of them, in fact, is doing business in SA and Egypt.”

“The world of technology is restructuring, we know for example that artificial intelligence is coming back onto the scene – that is going to have a huge impact on human beings doing repetitive work.”

Kouakou predicts that layoffs globally will continue and eventually impact Africa, but because of the numerical difference in staff complements (between US and European firms and those in Africa), this impact will not be as serious. 

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