In the first month of the year, tens of thousands of tech workers were laid off, but the financial troubles of internet behemoths like Google, Amazon, Microsoft, and others haven’t affected the auto sector.
Regulars like Ford and GM have not yet made any announcements that come near to the massive layoffs that have resulted in the unemployment of more than 55,000 tech workers so far this year.
There have undoubtedly been some setbacks. Ford is preparing to eliminate 3,200 jobs in Europe. 1,350 workers will lose their jobs when Jeep manufacturer Stellantis stops operations at a plant in February.
However, since the auto sector has already seen significant cuts over the past few years, there is no need for them now.
According to Richard Surridge, founder of the recruiting company AVANT Future Mobility, “Legacy automakers have spent the last three years figuring out how they’re going to go after electrification, autonomous driving. Or increasing ADAS rather than full autonomy — and their connected car strategy.”
Because of low loan rates and a constant flow of fresh investor capital. Tech companies have experienced uninterrupted growth over the past ten years. The tech sector is going through. It’s the first significant period of budget restraint as these companies move into a new stage and a changing economy.
Surridge observed that the tech sector has the opposite personnel issue from the automobile sector, saying “all of the tech companies are a touch bloated.” In order to fully pursue the future of mobility, which mostly entails electrification, batteries, and software, “Legacy Auto is Underpopulated.”
The downsizing phase of the auto sector began years ago.
Automakers previously made changes to their workforce before the pandemic and throughout it in order to get ready for the enormous EV transition and the arrival of other industry-changing shifts.
For instance, Ford eliminated 7,000 positions in 2019. In response to a protracted union strike, GM also cut tens of thousands of employees and closed factories in that year. These reductions were made by both businesses. As they got ready to revamp their operations for an electric future.
Martin French, managing director at the consultancy Berylls, told Insider that his company has grown accustomed to witnessing the automobile sector adjust. And downsize over the course of many years. He pointed out that the bankruptcy filings of GM and Chrysler in 2009 taught the whole automobile sector many difficult lessons. Causing many to take a defensive stance rather than respond to difficult situations as they arise.
Tech job losses may be advantageous for the auto industry.
While technology eliminates thousands of jobs, automakers are in dire need of personnel. According to experts and executives, certain legacy companies may take advantage of hiring possibilities during the layoffs.
Layoffs at tech-focused auto firms like Arrival, Rivian, and Britishvolt, as well as the shut down Argo AI. It could help established automakers still seeking to expand their tech talent in recently established electric vehicle divisions.
According to Stephen Beck, founder and managing partner of consultancy cg42, companies like Ford and GM would be wise to snag this talent.
” Beck added, “The need for skill is very high compared to electrification, contemporary manufacturing, networking, et cetera,” Beck added. “The battle for talent is continuing in the automotive business. And the talent pool is still quite narrow.”
Even after tech workers were laid off there is still hope.