Github To Layoff 10% Of Global Workforce In Latest Tech Cuts

Key takeaways

• Github will be cutting their staff numbers by 10%, equating to around 300 full time employees
• CEO Thomas Dohmke has stated he wants the company to focus more on their AI capabilities, including the coding assistant Copilot
• It’s part of the broader AI push from parent company Microsoft, who recently invested $10 billion into ChatGPT creator Open AI

Github has announced plans to cut its workforce by 10% and will go fully remote, closing all of its physical offices as their leaves expire. They announced a hiring freeze back in January, and this will continue as part of the cost cutting operations.

As well as shutting down their physical operations and showing staff the door, they’ll also be conducting efficiency-led changes throughout the business to bring costs down.

If it seems like there are new layoffs announced every day, it’s because there practically are. We’ve seen layoffs from all across the tech sector, including household names like Google, Meta and Microsoft.

Speaking of which, Github, which is a code hosting platform that allows developers and engineers to work remotely on joint projects, was acquired by Microsoft in 2018. Up until now they’ve been careful to keep themselves independent, however these latest efficiency updates have seen corporate creep in.

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The Github announcement

So Github will be cutting their workforce by 10% and continuing their hiring freeze.

The company stated that, “We announced a number of difficult but necessary decisions and budgetary realignments to both protect the health of our business in the short term and grant us the capacity to invest in our long-term strategy moving forward.”

So for those workers who have managed to hold on to their jobs, their working conditions are likely to get a little worse. For one, Github has announced that they’ll be switching to Microsoft Teams for their videoconferencing, and moving their laptop refresh schedule up to four years from the current three.

Could be worse, obviously, but still.

CEO Thomas Dohmke sent out an email to Github staff saying that “Although our entire leadership team has carefully deliberated this step and come to agreement, ultimately, as CEO the decision is mine. I recognize this will be difficult on you all, and we will approach this period with the utmost respect for every Hubber.”

He also said that he wants Github to increase their focus on AI. Their Copilot tool is an AI coding assistant which has become increasingly popular within the software community. This AI push goes hand in hand with the broader AI vision from Microsoft, which recently invested $10 billion into ChatGPT creator OpenAI.

The investment has seen them integrate ChatGPT technology into their Bing search engine, and it’s a major disruption to the search market, which has remained relatively stagnant for years under Google’s watch.

With a concerted focus on moving the overall corporate group to an AI-centric offering, Microsoft has a rare opportunity to upset the power structure of Silicon Valley.

Who is Github?

If you’ve not come across Github before, they are a code repository service which allows for the storage of code that’s being worked on. Having this in a centralized way means that developers and engineers are able to make changes and adjustments from anywhere in the world.

It also allows for a central storage of associated details of the projects, such as notes and supporting documentation.

It’s one of many companies that have sprung up in recent years that facilitate working across multiple locations at once. Other examples in different industries include Canva, Figma, and even GSuite products like Google Docs.

Tech layoffs extend

But of course, Github isn’t the only company to be laying off workers. In the current environment, it’s probably easier to list the companies who haven’t laid off any staff.

According to what has become the central source for layoff tracking, layoffs.fyi, there were 159,786 jobs cut by 1,044 companies in 2022. So far in 2023 there have already been 101,617 cuts across 334 companies.

Those numbers represent the trend we’ve seen, with smaller and younger companies copping the brunt of the layoffs in 2022, with large established companies able to hold off for a number of months.

But the floodgates have now well and truly opened.

It may come as a surprise, but the market reaction to the layoff announcements tends to be a positive one. At the moment, with an unstable looking economy being placed under further pressure by the Fed increasing interest rates, shareholders are worried about cash flow.

The concern is that if revenue falls through lower consumer demand (which is what the Fed is aiming for), companies will take a hit to their bottom line.

And seeing as they can’t magically improve customer demand in the short term. There’s only one way to improve the equation. And that’s by spending less money.

While tech companies do have significant fixed costs like servers and their physical locations, employee pay and benefits are the biggest expense for most companies. Cutting this down, even if it means severance packages, is generally well received because it means less pressure on profitability.

At least in the short term.

The bottom line

The turbulence in tech continues. 2022 saw huge drops in stock values after a major bull market which ran throughout most of the pandemic.

Now that billions of dollars of value has been wiped off market caps and the inflation situation has started to slowly normalize, investors are looking forward to how Big Tech is going to recover from the bear market.

With the disruption from AI and the ongoing battle from streaming market share, it’s hard to tell who’s going to come out on top.

That’s why we created the Emerging Tech Kit. Tech itself is a solid bet for future returns, but there’s no way to know who will be the winners and who will be the losers. This Kit seeks to answer that question with the help of AI, which analyzes masses of historical data to make predictions on the movements of tech assets across four different verticals.

Every week our AI predicts how various individual investments are going to perform, across tech ETFs, large cap tech stocks, growth tech stocks and crypto via public trusts. It then automatically rebalances the Kit in line with these predictions.

It’s like having your own personal hedge fund, right in your pocket.

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