Elon Musk's creative chaos on social media

What is happening in the US with giant technology companies is not surprising: The mass layoffs underway are a natural consequence of the recovery from the coronavirus pandemic, the war in Ukraine, and all the accompanying issues brought on by both.

It is also due to people’s dependence on electronic services and platforms, with the average time spent on the internet in those days rising to 12 hours per day. This boom, exacerbated by the pandemic,saw tech companies expand in a poorly-planned way. It led to random hiring processes that were unnecessary, causing a bubble that, according to the Guardian, has now exploded.

In particular, there has been a preoccupation with Elon Musk and his activities since acquiring Twitter. Although the idea of layoffs at the company was on the table before his arrival, this was prompted by high inflation rates at levels not seen in 40 years, with the US Federal Reserve increasing interest rates by 75 basis points four consecutive times, amid expectations of a coming recession in North America and Europe.

Musk’s dispensation with the services of 75 percent of Twitter’s employees to date is reasonable due to the domestic and broader geopolitical situation. It is also a result of the decrease in advertising due to the feature of controlling the tracking of users’ behavior on Apple iPhones, and this decline naturally indicates a drop in the effectiveness of the medium. If placed into context, the company loses $4 million every day, and in the last 12 months, only 10 percent of its employees went to work at its offices.

The headquarters provides free meals to employees, which drains $13 million annually without actual returns. Taking the company off the stock exchange was a masterstroke, together with reinstating the account of former US President Donald Trump, who provided great success for Twitter’s traffic in the past, as is trying to attract influential content creators from YouTube and pay them 10 percent more.

Twitter’s layoffs encouraged Mark Zuckerberg, the owner of Meta, to lay off 13 percent of his employees, and according to a recent report in the New York Times, Amazon E-commerce will lay off 10,000 employees in the coming period.

The total number of employees in the US tech sector is around 6 million people, less than 1 percent of the total American workforce. According to 2022 statistics, there are 207 million unemployed people worldwide, who deserve as much attention as the high-profile, vociferous techies currently in the news headlines. Bill Gates believes that the current condition will continue to grow exponentially for at least five years.

Musk’s dispensation with the services of 75 percent of Twitter’s employees to date is reasonable due to the geopolitical effects of the Ukraine crisis and the subsequent increase in prices

The losses for American tech firms are significant. According to the Financial Times, the market value of Apple has dropped by 24 percent, Google 35 percent, Microsoft 37 percent, Snapchat 40 percent, Amazon 52 percent, Netflix 63 percent, and Meta by 78 percent. Meta was worth more than a trillion dollars in 2021 and fell to 270 billion this year. In total, the Nasdaq index of shares of tech companies fell 33 percent in 2022, and lost nearly eight trillion dollars — a huge, unprecedented drop in the history of the exchange.

The links between Silicon Valley in California and politicians in Washington are very close; Google was the biggest donor to former US President Barack Obama’s 2012 re-election campaign.

Google is also working to influence further US elections, via donations but also pressure groups. It also has previously tried to influence federal authorities by donating to them, and worked hard to convince the government to put its own laws on the sites of its projects that it works on. Its efforts failed — federal authorities refused, and imposed restrictions against monopoly and exploitation of its users’ data.

In 2015, new amendments to the Saudi Labor Law were enacted, which identified cases of legal dismissal in the private sector, and restricted the compensation that must be paid to the dismissed employee. There is no difference between those now dismissed in the Kingdom and those dismissed from American tech giants. The following year, private sector companies laid off 100,000 employees, justifying their actions by wanting austerity and to cut expenses. The Kingdom and the US agree on this aspect.

Perhaps more curiously, the drop in its value means investment in certain tech giants, like Meta, is more possible, and the Saudi Public Investment Fund may want to think of studying the opportunity to seize a significant stake in it — provided it is fair, just, and legal, the conditions are favorable, and the timing is right.

• Dr. Bader bin Saud is a weekly columnist for Al-Riyadh and Okaz, a media and knowledge management researcher, and the former deputy commander of the Special Forces for Hajj and Umrah in Saudi Arabia.