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As the duplicity of both advancement in AI and a global recession continues to co-exist, Microsoft finds itself bang in the middle of both. Last week, Microsoft-owned GitHub released the ChatGPT-integrated GitHub Co-pilot X , an upgraded version of its popular coding assistant. And suddenly, a few days ago, the software code-hosting platform fired its entire engineering team in India.
The team reportedly comprised 142 employees. The firing is said to be a part of GitHub’s reorganisation plan announced last month to shed 10% of its workforce in a bid to ‘cut costs’. Prior to this, GitHub CEO Thomas Dohmke had sent an internal email to the employees explaining the move.
More money in AI, not people
“We are announcing a number of difficult decisions, including saying goodbye to some Hubbers and enacting new budgetary realignments designed to protect the short-term health of our business, while also granting us the capacity to invest in our long-term strategy,” Dohmke said, emphasising on the company’s plan to integrate AI “with urgency”.
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“The age of AI has started and we have been leading this change with GitHub Copilot , our most successful product launch to date. We have an enormous opportunity to build an integrated, AI-powered GitHub with urgency,” the email read.
GitHub confirmed the news later saying, “As part of the reorganisation plan shared in February, workforce reductions were made today as part of difficult but necessary decisions and realignments.”
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The move seems like an oblique admission that Microsoft wants to save money spent on employees and invest it in the AI race that is getting hotter by the minute.
The move is reminiscent of what Nadella did in January leaving Microsoft’s priorities apparent to everyone. On January 18, Microsoft made the decision to slash 10,000 jobs, which was roughly 5% of the company’s workforce. And within a matter of days, on January 23 it had announced a ‘multi-year, multibillion dollar’ investment in Sam Altman’s OpenAI .
From a major hub to complete shut down
GitHub’s move strikes as an unusual one. First off, India is one of the world’s biggest developer markets and a major engineering hub for many tech companies. India is the second-largest in terms of the GitHub developer community ranking just after the US.
In 2021, things couldn’t have looked more optimistic for GitHub’s India office. The company had announced an Open Source Grants under which select Indian developers would be offered a grant of Rs 1 crore. A GitHub Sponsors service was also included as a part of the prize which allowed Indian developers to receive financial backing for projects.
Secondly, companies normally prefer to lay off employees who bear a higher cost to the company. Gergely Orosz , who broke the news first on Twitter, questioned why employees from the South Asian region were let go instead of the West, “…Why India? Where the cost of labour is much cheaper than, say the US, and likely cheaper than EU?”
The team in India was also reportedly working on core projects in tandem with the US team. An internal source, who used to work at GitHub , stated, “The India teams worked on projects such as GitHub Education, GitHub Packages , NPM , and chatops, among others and included members from the US, Europe and India.
“Meanwhile, the contributions from all regions were almost equal, although this depended on the number of people from each region. Firing employees in Europe is harder due to strict layoff guidelines. It is unclear what the plan is for the US region. It appears that India does not have any policies regarding massive layoffs. They also closed the Korea region, but our team did not work with them.”
Another former GitHub employee put up a LinkedIn post saying, “It wasn’t over hiring. Acquired companies usually have to go through a lot. We just happened to be in the eye of the storm.”
Google’s rival to Copilot
The abruptness of shutting down an office as important as India also indicates the amount of pressure both Microsoft and Google are under to stay ahead of the other.
As expected, Google is close on Microsoft’s heels. Just yesterday, AI code collaboration platform Replit announced a partnership with Google Cloud to build what sounds like an AI-powered competitor to GitHub Copilot.
Meanwhile, fresh GitHub announcements are on a tear. Earlier this month, Microsoft unveiled Microsoft 365 Copilot as a productivity tool for enterprises. Nadella also announced Security Copilot , a new ChatGPT -like AI assistant to make faster decisions during incidents of security breaches.
So, as some Twitter users are theorising, can we place the blame for the layoffs squarely on AI?
