Over 40,000 Tech Layoffs Reported in 2024 So Far

Tech Industry Sees Over 40,000 Layoffs in 2024 So Far

(USNewsBreak.com) – The rise of artificial intelligence (AI) over the past few years has dominated the tech landscape. ChatGPT, launched in late 2022, has given way to several more models and tools from tech giants like Microsoft, Google, and Meta. Recent reports indicate the rise of AI has contributed to many layoffs in the tech industry.

Mass Layoffs

According to layoffs.fyi, more than 170 companies have laid off nearly 44,000 tech sector employees so far this year as of the time of writing. The biggest losses come from Cisco, which is planning to cut 4,250 jobs. Microsoft will dismiss 1,900 workers, PayPal is cutting 2,500 positions, and eBay is eliminating 1,000. Forecasts indicate Google and Amazon will lay off hundreds, as well.

Yet, this isn’t the first time that tens of thousands of people in the technology sector have lost their jobs. Between November 2022 and February 2023, nearly 200,000 jobs disappeared.

According to The New York Times, the layoffs differ between larger and smaller companies. Big tech eliminations, like those at Meta, are typically designed to reduce costs, while small businesses cut jobs to survive. With the latter, they are struggling to find funding because venture capitalists are no longer taking risks as they did before inflation hit hard.

What’s to Blame?

Experts attribute one of the reasons behind the shift to the 2020 health emergency. During the period between 2020 and 2022, the sector grew at about 1.5 times the normal rate. Employment growth boomed from a steady 4.5% rate between 2015 and 2019 to 7%.

The trends companies expected to develop failed to pay off. When people expected doom and gloom, they got a lot more than they bargained for when the economy rebounded. Unemployment dropped and created more favorable conditions much quicker than people expected. Now, According to The Hill, Glassdoor Economist Daniel Zhao said, “Companies are trying to trim their workforces after a few years of very aggressive hiring.”

In 2022, the growth in the sector slowed down, dropping from 7% to 6%. In 2023, it dropped significantly to just 0.7%.

Yet, there’s another driving factor: AI. Companies are now eliminating positions “not related to AI,” per Daniel Keum, a Columbia Business School associate professor of management. According to The Hill, He said companies are doing “a lot of reorientation, reprioritizing, repositioning across the board” to make themselves competitive in a growing industry. Instead, tech experts claim AI will drive future expansions and hiring because, as Julia Pollak, chief economist at ZipRecruiter, said, “the AI revolution is hitting the shores of tech.”

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