In previous years, high-paying jobs in the tech industry were the dream of many. After a turbulent 2023, tech company employees are now facing a rather uncertain future as they continue to face the risk of layoffs in 2024.
According to the New York Times, many technology companies have been cutting staff since the beginning of this year. The video game software company Unity Software (USA) announced a 25% reduction in its workforce, equivalent to 1,800 people, becoming one of the first major technology companies to lay off a large number of employees in early January. Xerox Corporation (USA) also announced a 15% reduction in its workforce, equivalent to 3,450 people, as part of a restructuring effort to save costs.
Alphabet announced plans for a leaner and more focused investment strategy as parent company Google laid off approximately 1,000 employees across various departments, including its voice assistant unit and the teams responsible for Pixel and Fitbit. Personnel in its core engineering division were also among those laid off.
Fitbit co-founders James Park and Eric Friedman also left the company amid the tech giant's continued cost-cutting. Fitbit was acquired by Google in early 2021 for $2.1 billion.
In the first week of January, Amazon laid off hundreds of employees working in its streaming division. Hundreds of jobs were also cut at Amazon's live streaming platform Twitch and audiobook app Audible. The popular language learning and text translation platform Duolingo, with over 500 million users, decided to cut 10% of its temporary workforce to replace them with AI technology.
According to the job tracking website Layoffs.fyi, technology companies laid off over 7,500 employees in January. Reuters reports that these new layoffs signal that tech companies will continue to cut jobs in 2024 as they focus on investing heavily in generative AI (genAI).
Analysts and industry experts believe that this year's layoffs will be more targeted. Meanwhile, major tech companies assert that the peak of layoffs has yet to be reached and that they will undergo even more drastic workforce restructuring in 2024 to save costs and improve operational efficiency.
The wave of layoffs is occurring despite a robust US labor market, with unemployment rates in the world's largest economy remaining low. However, the job-seeking environment is deteriorating. The Federal Reserve's interest rate hikes are increasing borrowing costs, forcing many businesses to reconsider expansion plans.
Household savings, which have supported Americans' spending in recent years, have been declining. This has led many to leave their comfortable lives and seek employment. Meanwhile, businesses are reducing hiring and offering lower salaries.
Layoffs.fyi estimates that in 2023, the total number of tech workers laid off will exceed 224,000; this figure was 164,969 in 2022. Amazon had the highest number of layoffs (27,410), followed by Meta (21,000), Google (12,115), and Microsoft (11,158).
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