Multinational layoffs: What does this mean for international job seekers?

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Published on 2024-04-22 at 10:00 by Asaël Häzaq
The tech world, already shaken in 2022-2023, is still in turmoil. As AI continues to develop, other sectors will come under the scrutiny of multinational corporations. What does this mean for aspiring expats? Should this be seen as a risk for international recruitment?

Multinationals are laying off staff to cut costs

The year 2024 has begun with a new wave of layoffs that shows no sign of stopping: Amazon, Meta, Discord, Duolingo, Google, IBM, Microsoft, Dropbox, eBay, etc. But tech giants aren't the only ones slashing their workforces. Other multinationals, large corporations and startups are also shedding talent: Nike, Citigroup (banking), BlackRock (investment management), OpenClassrooms (e-learning specialist), ManoMano (e-tailer specializing in home improvement and gardening), and so on.  

Why are there so many layoffs? Multinational companies try to be reassuring. The number of companies and workers affected may be impressive, but according to them, it is part of the "normal routine"of any large company. They point out that these layoffs do not prevent hiring - on the contrary. In fact, many multinational companies are shedding part of their workforce in order to position themselves better in the international labor market and increase their competitiveness. Large corporations also claim to be adapting to demand. Matthew Friend, CFO of Nike, explains to the global media that the company is reducing its workforce in response to "more cautious consumer behavior" worldwide. Inflation continues to weigh on both international demand and corporate costs. However, it is not the sole reason for this latest wave of layoffs.

AI's impact on international recruitment

The most optimistic engineers and scientists saw the grand debut of ChatGPT as a positive signal for all foreign talent. For them, multinationals would need ever more talent to manage new technological tools. New tools that were, in their own way, helping to build a "borderless" world where only workers' skills would count.  On the other hand, skepticism saw risks for high-tech professions - and not only.

Companies like IBM, Dropbox and Google agree that their redundancies are partly due to AI. These major groups, and many others, prefer artificial intelligence to international workers, who are sometimes behind the development and/or control of AI. In March 2023, Microsoft, which had invested billions in OpenAI (creator of the famous ChatGPT), laid off the team in charge of AI ethics. More than 10,000 workers were laid off.

Two months later, IBM shook up the international labor world: its commitment to AI would threaten almost 10,000 jobs. At the time, IBM CEO Arvind Krishna predicted "around 30%" of non-customer-facing jobs would be "easily replaced by AI and automation within 5 years." Arvind Krishna is one of the first multinational executives to assume a plan favoring AI over international recruitment. The same frankness comes from Larry Fink, founder and CEO of BlackRock, who sees AI as a good way to increase productivity. In January, the multinational announced that it was laying off 3% of its workforce worldwide.

Should prospective expatriates be concerned?

Could this be a sign of distress for the international labor market? Observers are reassuring. Despite the Goldman Sachs report predicting that nearly 300 million jobs will be threatened by AI by 2023, there's no reason to panic.

First and foremost, experts point out that multinational companies continue to hire internationally. Layoffs are not hampering hiring, and foreign talent is still in high demand in various sectors, especially those with skills shortages. National immigration policies align with this trend, prioritizing economic immigration and the recruitment of high-skilled workers. While AI is destroying jobs, it is also creating them, especially in high-tech sectors. 

Countries also need foreign workers in sectors not affected by AI. Demographic decline spares no power and influences immigration policy. Similarly, large corporations will continue to hire. Therefore, professionals can still seek career opportunities overseas.

However, other observers call for more government regulation, just like multinational corporations, which are simultaneously pursuing  AI research. The most cautious experts believe that it's up to governments to have the last word, pointing out that the current international labor market context justifies the indispensable cooperation of states.