Mass layoffs and personnel scandals
In 2023, the tech landscape saw thousands of IT firms and a workforce that sometimes shifted dramatically. Across more than 1,100 IT companies, mass layoffs affected tens of thousands of workers, with the trend already evident comparing to 2022. Companies trimmed teams not only to trim costs but to recalibrate staffing after the pandemic era expansions that left many with more people than needed. The scale of layoffs grew clearer as the year progressed, and the industry moved toward leaner staffing models that focused on core operations rather than broad headcount.
In large tech, reductions often hit hundreds or thousands of employees at once. Alphabet, the parent company of Google, illustrates the pattern. Early in the year, the company faced a sizable downsizing that reduced its total headcount by roughly 6%, leaving about 12,000 fewer staff members. The briefing cycle around September echoed January’s turmoil, with a similar wave of personnel changes affecting groups involved in hiring and staffing decisions at Google.
By year-end, a third wave of layoffs spread through many firms. In December, Spotify announced a cut of about 1,500 jobs, representing roughly 16% of its workforce, following earlier rounds in June and January. Tech firms everywhere sought to stabilize finances after rapid hiring during the pandemic. Across the sector, tens of thousands of skilled professionals faced unexpected exits from the labor market as companies aimed to reduce expenses and realign growth plans.
Beyond workforce moves, the year also saw noteworthy scandals within major foreign tech players. One widely discussed incident was a brief, highly publicized attempt to dismiss OpenAI’s CEO in November. Although short, the episode sparked significant chatter and led to a rapid reversal by the board, which brought back Sam Altman while signaling leadership changes at the board level.
Meanwhile, Facebook’s parent company Meta faced criticism tied to its outsourcing strategies. The firm ended its relationship with the outsourcing firm Sama, which managed about 260 employees dedicated to social media content moderation in Nairobi. The decision stirred concern among workers who suddenly found themselves navigating a tougher job market. The move followed complaints from Sama staff about working conditions and pay, fueling speculation that the change was aimed at limiting union activity.
Fines and rights violations
Throughout 2023, major technology players faced a string of fines related to privacy, antitrust, and content regulation. Regulators imposed penalties in the millions to billions of euros and dollars in several cases, underscoring ongoing scrutiny of how large tech handles user data and complies with evolving laws.
In January and May, Meta was fined by the Irish regulator for practices tied to user consent and data processing, with amounts reaching hundreds of millions of euros. The rulings highlighted issues around how terms are presented to users and the availability of alternatives for data handling. In another matter, Meta faced penalties related to transferring user data to parties outside the European Union.
TikTok faced its own regulatory burdens in the UK, agreeing to compensation for breaches in collecting data from children under 13. In parallel, Google faced a series of legal actions, including a substantial settlement over alleged covert data practices in the United States and a separate verdict from the Moscow court for not removing certain prohibited content. These cases marked Google’s ongoing legal exposure across jurisdictions.
Creative and scholarly communities also weighed in on copyright concerns. A notable early 2023 lawsuit targeted generative AI databases, with artists accusing Stability AI, Deviant Art, and Midjourney of embedding their works without permission. Later in the year, authors including several Pulitzer Prize winners challenged OpenAI and Microsoft over the use of books to train AI systems, raising debates about how intellectual property should be treated in AI-driven ecosystems.
Project failures
2023 exposed rocky terrain for some foreign tech initiatives, particularly in metaverse development. Projects long seen as promising encountered skepticism as tangible results lagged behind expectations. The realization that certain metadata frameworks did not deliver expected profits led many teams to rethink or halt efforts, and some projects were ultimately shuttered.
Microsoft and Meta paused or redirected efforts in the industrial metaverse space, with layoffs affecting groups tied to these initiatives. Meta’s Agile Silicon team faced workforce reductions as part of broader consolidation around immersive tech. Likewise, Google chose to discontinue certain augmented reality hardware products after trials that failed to gain broad market traction.
These outcomes fed a broader narrative: international tech firms faced public distrust and investor caution as they grappled with ambitious bets that did not pay off as hoped. The market’s appetite for high-risk, future-forward ventures remained tepid, prompting many executives to reassess strategic bets and timelines.
As 2024 approached, the industry continued to watch for signs of whether the downturn was temporary or a longer-term recalibration. The sentiment among users and investors alike leaned toward a more critical view of corporate promises and a renewed focus on sustainable, transparent practices in technology development and deployment.