How AI is impacting revenue and layoffs

AI is having a big impact on big tech companies, and not always the impact that employees would like…

In recent tech earnings calls, big companies like Microsoft, Google and Meta posted strong or better-than-expected results, and some of that growth was driven by AI.

In Microsoft’s case, Azure revenue was up 27% year over year, and Microsoft said it was already generating new sales from its AI products.

Google was less specific about its AI plans, but committed to incorporating generative AI into its products moving forward.

Meta has been reported to be working to retool its infrastructure for intelligent artificial intelligence, but saw a surprise increase in sales last quarter.

But there is another side of the coin…

All of these companies face tremendous pressure from shareholders to become leaner. Some have already made cuts, with more expected to follow. And they all rely on AI to capture efficiency.

In practice, we saw a prime example of this with Dropbox’s recent announcement that they are cutting staff by 16%, or 500 people.

One of the main reasons for the cuts.

artificial intelligence.

Co-founder and CEO Drew Houston wrote in an email to staff that the company must “act urgently” to take advantage of the opportunity AI presents. But to do that, the company needed a different mix of skills than it has today;

“In an ideal world, we’d just transfer people from one team to another. And we’ve done that wherever possible. However, our next phase of growth requires a different mix of skills, particularly in artificial intelligence and early-stage product development.”

What do these announcements mean for marketing and business savvy workers?

I reached out to Paul Retzer, founder/CEO of the Marketing AI Institute, for answers on Episode 45 of the Marketing AI Show.

Here’s what you should think about…

  1. Companies are under increasing pressure. “I really feel that given the conversations I’ve had with some of the larger companies, there’s going to be more pressure to find ways to be as efficient as possible,” Retzer says.
  2. …Most SaaS companies. SaaS is likely to be brutal, Roetzer says. He anticipates the impact on the workforce, especially middle managers, product teams and developers who don’t know how to build and use AI.
  3. But it’s not all bad news in every area. “I’m optimistic that there will be time in many industries to figure out how to reallocate this workforce,” Rotzer says. Not to mention, many industries have current worker shortages that AI can actually help with.
  4. In most cases, talent should be developed, not replaced. There is still a shortage of AI-specific talent in many business functions. So what Dropbox is trying to do, replacing talent with AI-savvy professionals, isn’t necessarily easy to do.
  5. It provides opportunities for many knowledge workers. You have the opportunity to be the person in your organization who becomes the person working on artificial intelligence and helping the company move forward, says Retzer. To get started, take a few weeks to get a basic understanding of AI. Be the person to start an internal AI board to figure out AI in your company’s context.

Bottom line: “If you’re sitting in these bigger companies and you’re thinking, can I really be that person? The answer is yes,” says Retzer.

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