More tech layoffs even in the growth area of cloud computing. Employees beg Google, “not to be evil” and Elon Musk tells the press he doesn’t give a..
These stories and more, including a smattering of optimism in Hashtag Trending, for Tuesday March 21st .
I’m your host, Jim Love, CIO of IT World Canada and Tech News Day in the US.
And here’s today’s top tech stories.
Amazon announced another 9,000 layoffs yesterday. It’s another huge reduction for the company that has been in growth mode for years. The latest round of layoffs will bring Amazon’s total recent reduction to 27,000 employees, 9 per cent of its roughly 300,000 member workforce.
This round has a surprise, however – as industry reports are that as much as 10 per cent of those reductions might come from the company’s cloud services provider, Amazon Web Services. Or AWS
With so many companies moving to the cloud, the reduction may come as a surprise. According to some, AWS had been thought of as untouchable until recently.
But according to Ray Wang an industry analyst with Constellation Research, Amazon has had to look carefully at every part of their organization, and AWS was no exception. Wang note that “this was part of a larger trend of tech companies getting lean again, and Amazon had gotten bloated in years past. The finally competed their analysis a few weeks back and now AWS has cuts too.”
The company’s most recent earnings report showed that the cloud division’s growth rate had slowed, down from 39 per cent growth last year to 20 per cent this year. While many companies would be thrilled to have 20 per cent growth, CFO Brian Olsavsky has indicated that there may be a further slowing of growth. In an article in Tech Crunch, he was quoted as saying “As we look ahead, we expect these optimization efforts will continue to be a headwind to AWS growth in at least the next couple of quarters.” He noted that in the first month of the year, AWS’ year over year revenue growth had dropped to “the mid-teens.”
For years cloud has evolved to be the leading architecture for corporate systems, and in some cases, the “de facto” standard. In a recent study of CIOs by ITWC’s Research group even as late as the fall of last year, cloud growth was projected to be very strong in the next two years. But now, there are some indications that the cloud infrastructure market may be starting to slow.
Google employees have sent an open letter to CEO Sundar Pichai to demand that the company do better in handling its layoffs.
Employees are suggesting strategies such as freezing new hires and prioritizing laid-off workers for any job vacancies. A key demand also involves letting employees finish parental and even bereavement leave before being let go.
The letter was signed by over 1,400 workers and says:
“Nowhere have workers’ voices adequately been considered, and we know that as workers we are stronger together than alone.”
One of the key areas of complaint has been the treatment of employees who are on various types of medical or compassionate leave. Some of the stories are heart wrenching.
An article in the Insider told about Google employee who was told he lost his job while he was on leave to care for a terminally ill parent.
Employees who survived the cuts told how some employees who kept their jobs cried during meetings the day the layoffs were announced. A report from CNBC mentioned a woman who was laid off a week before giving birth.
The same article quoted another employee who posted that she gave birth just before receiving her notice:
She wrote “On 1/20/23 at 7:05 am while in the hospital bed holding my hours-old newborn I learned that I was part of the #thegolden12K of Googlers who had been laid off, I was a Googler for 9.5 years.”
In response more than 100 former workers have organized a group they call “Laid off on Leave” demanding the company honour the leave of employees who have been laid off or terminated.
But certainly one of the most cutting comments from any group was the one that referred back to Google’s original core value, “Don’t be evil,” – it said, asking for leadership to respond promptly to employee concerns.
Gartner survey finds that 72 per cent of high-tech leaders expect to grow revenue in 2023, despite economic uncertainty.
More than that, nearly half of those leaders surveyed think they will be able to outperform their competition this year.
The survey was conducted in the the second half of 2022 with 195 responses in the US, Canada, the UK, France and Germany.
These findings support Gartner’s forecast that overall IT spending will grow 2.4 per cent in 2023, with enterprise IT spending projected to grow 4.1 per cent. The context of IT spending is changing as buyers increasingly value and make investments in business outcomes rather than buying solutions, according to Gartner.
But there is a paradox in the results. Despite the optimism the survey found that technology providers were taking actions indicative of a slowdown or drop in spending:
56 per cent slowed hiring
52 per cent implemented spending cuts
43 per cent reduced spending on marketing
Which led to an interesting finding:
“Outperforming the market through an uncertain market requires an above average ability to execute on revenue ambitions,” said Mark McDonald, Vice President and Gartner Fellow. “The survey results indicate that almost half of firms (46 per cent) do not have a sufficient ability to execute to reliably realize their revenue goals.”
So the question is, are the contractions we’ve see a reflection of a lack of confidence in the market or a reflection of tech companies lack of confidence in themselves?
Gartner’s experts challenge us all to focus on the relevance of technology solutions, presumably to focus on issues important to the business including efficiency, customer experience and growth.
According to McDonald, that relevance is critical.
“Changes in context challenge the relevance of technology solutions. Lower relevance reduces willingness to pay and renew relationships. Gartner sees relevance as the connection between a provider’s solution and how applicable it is to current customer needs. That connection exists at every level from the C-level to individual developers. Without relevance, we see sales cycles extend and renewals at greater risk.”
Data leaking and its impact on companies reputations – is it the new ransomware strategy
The original strategy of ransomware was to break into your systems, encrypt your data and then charge you a ransom to get the decryption keys. Companies have gotten smarter about having secure backups and being able to restore.
In response, ransomware perpetrators have altered their strategy, particularly with large companies. Now they not only encrypt data, they steal key data first and hold that hostage.
Two examples of this have surfaced from two huge companies. Over the past few days those affected include Amazon’s Ring systems, the security camera system linked to the doorbells of thousands if not millions of customers. And Elon Musk’s firm Space X has had the schematics to one of its rocket engines stolen.
In the case of Amazon’s Ring, the ransomware gang ALPHV put its claim to having hacked Ring on its site on the dark web. But group also hasn’t yet provided any proof.
Without proof of the data leaked, we can only speculate on the data that could have been stolen. Jordan Schroeder, Managing CISO at Barrier Networks, was reported in CPO magazine as saying “This is a highly worrying incident that puts critical consumer data at risk. It is not yet known what data, or if any data, was obtained by the attackers but given the type of information Ring will have access to, it could range from PII, financial information, to even data relating to the physical locations of people and how they control their home security.”
But Lior Mazor, Global Head of Information & Security at Perimeter 81, points out that the damage may be more related to reputation and call into question the security of the Ring devices and networks. This could be a stinging inditement, particularly since it’s not the first time Ring devices have been reported to have been compromised. “Previous reports mentioned there may have been a misconfiguration, which inherently weakens the device’s security. There are a few ways this breach could have been executed. The Ring device is a poorly configured IoT device and it is possible the attackers may have discovered a Back Door or a Zero Day vulnerability in the device itself.”
Elon Musk’s problems are different but equally challenging. It appears that Musk and his company SpaceX is a victim of what might be termed a “supply chain attack.”
Another ransomware gang, called LockBit managed to compromise Texas based Maximum Industries, a third party vendor and steal the schematics to the Raptor V2 engine used by Space X. This time the gang offered proof, posting some samples of documents on the dark web and threatening to start an auction in a week if Space X doesn’t pay the ransom.
And as much as this seems like something that happened to two big companies who will somehow survive it, it does pose a question for us all?
In both cases, one has to ask – is it the value of the data or the lost trust that is going to be the biggest loss. In the case of Ring Central, are you more inclined or less inclined to buy their product having heard about this ransomware issue? Would large companies do more or less business with the laser cutting firm that lost the Space X specs?
Clearly, every company – big and small – has to take the issue of ransomware and data theft seriously.
Do you have a tough question for Twitter. Elon Musk would like to tell you that he doesn’t give a… a…
Musk loves symbolism. Few will forget him walking into the Twitter offices carrying a sink – hoping the new regime and his desire for change would – sink in. Get it. Sink in.
Well he’s at it again.
In a novel response to journalistic criticism, given that Musk has fired the public relations staff that handle press inquiries, Twitter has announced that it will in future respond to press questions with a ..
Poop emoji. The poop emoji is done via a tweet, of course.
And there’s a lot to ask about – layoffs, mass resignations, changes in user experience, outages, why Musk would mock someone with a disability up to and including whether Elon Musk will eventually step down.
So if you want to ask a question, the answer will be an automated tweet of a poop emoji.
I’m tempted to say, “ever mature” but maybe the best response is – not to give tweet.
That’s the top tech news for today. Hashtag Trending goes to air five days a week with the daily tech news and we have a special weekend edition where we do an in depth interview with an expert on some tech development that is making the news.
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I’m your host, Jim Love, have a Terrific Tuesday!