Griffin on Tech: Tech is eating itself with AI, vocational training needs a rethink

Barely five months into 2025, tech layoffs internationally have reached 59,413 according to Layoffs.fyi.

Microsoft this week said it would cut 6,000 jobs this year, despite rapidly growing revenue and profits, in a move that sees 100 roles in its Australian division at risk, and an unspecified number locally.

The cuts aren’t as intense as those undertaken at tech companies in 2022 and 2023, when they rightsized their way out of the pandemic and began ordering remote workers back into the office. In Q1, 2023 for example, 157,000 employees were laid off at tech companies globally. Many of these companies had grown flabby during the boom times of the pandemic when the digital pivot, low interest rates and stimulus cash saw intense demand for tech skills.

 But this time, there appears to be a different driver to the right-sizing - the prioritisation of artificial intelligence.

After all, tech companies are enthusiastic consumers of their own dog food. They have now reaped some of the efficiencies of AI, including the ability to use the tech to do the work of humans. This trend signals the way forward for the economy in general, as every industry becomes a super user of AI.

Among those facing the cut at Microsoft includes its director of AI - Microsoft for Startups, Gabriela de Queiroz. 

“These days, no matter how hard you work, how much you advocate for your company, or how much results and visibility you bring – whether it’s helping Microsoft become a trusted name among AI startups or driving initiatives to make it a better place to work for hundreds of people – none of that makes you immune to restructuring,” she wrote somewhat indignantly in a linkedIn post.

Source: Layoffs.fyi

The AI infrastructure push continues at pace

Microsoft’s cuts come as it pursues US$80 billion in AI-related investments this year, most of it related to infrastructure - data centres, chips etc to build out its AI capabilities. 

Most AI vendors, from Microsoft to Saleforce, are going big this year on AI agents, moving beyond information-generating copilot services to automate tasks. 

Last night, while I was waiting for an event to kick off in Wellington, I designed an entire website on my phone using the AI agent-driven service Replit. Using a handful of prompts, I instructed the AI to build out the pages and customise the text. I had 80% of the work needed to finalise the website done in less than five minutes. There are Replit agents that can then take over to manage ecommerce transactions and automate interactions with customers making enquiries via my new website.

That gives you an idea of the nascent power of AI agents. 

New Zealand’s tech workforce took a major haircut in the great resizing of 2022 - 2023, so job cuts here are likely to be modest. But AI efficiencies will be felt by our IT workforce too. 

Multinational cybersecurity company Crowdstrike, which is very active in the New Zealand market, said last week it would cut 500 staff. Cybersecurity is one area where AI is transforming how networks are monitored and threats identified. It’s an industry where recruiting skilled staff is difficult and cyber teams are particularly plagued with burnout. AI is seen as helping address that issue, but there is clearly restructuring need to get the human-AI balance right.

When it comes to our approach to tech skills in New Zealand, Craig Young made an impassioned plea on my podcast this week for a dedicated focus on tech, digital and the creative economies in the new Industry Skills Boards the Government is establishing and which replace the Workforce Development Councils. 

Skills development missing tech

The focus of these is vocational training - apprenticeships, internships, and on-the-job skills development. In the tech space, we urgently need more of it, including in AI. But the current proposal for vocational training hasn’t much of a focus on tech and digital skills, despite the Government wanting to double tech exports by 2035. For instance, technology and the creative arts won’t be featured in an ISB. Well, not the sort of technology IT Professionals members are concerned with:

Where’s the tech?

Instead, tech-related training will be the responsibility of the New Zealand Qualifications Authority, which will “take on responsibility for developing associated qualifications and standards, and quality assuring how they’re used”, according to the consultation document.

While it’s fine that NZQA is setting the standards for how people are training in tech-related skills, there’s no wrap-around support for the industry doing the training, no dedicated focus and at least some resourcing, as there will be with the ISBs. This is very disappointing, as the current rate of progress in vocational training in tech related jobs isn’t enough.

Many tech companies offer internships and the larger ones offer apprenticeships or graduate programmes, but without strategic support and resourcing from the Government, Young says the skills gap will only grow.

“All credit to them, but they’re not getting the support that they need or being able to roll it out further. So, you know, I’m really disappointed because I think we’ve missed a trick,” he told me on The Business of Tech.

Submissions on the proposed new ISBs close on May 20th, so there’s still time to have your say on where tech should feature in the mix.