Tech Layoffs Have Surpassed the 100,000 Mark Since the Year Began

Tech layoffs continue into 2024, with companies showing no signs of slowing down even after over 260,000 job cuts in 2023. According to Stocklytics.com, tech layoffs have already exceeded 100,000 since the beginning of the year.

Most tech companies consider layoffs necessary to realign their organizational structure and priorities in preparation for future advancements.

The site’s financial analyst, Edith Reads, comments:

The recent layoffs accentuate the clear shift towards artificial intelligence and machine learning for these tech firms while also exposing the frantic workforce expansion that occurred during the pandemic, which companies now deem unnecessary.

Stocklytics financial analyst, Edith Reads

Tech Layoffs in 2024

Despite a boom in profits and sales this year, layoffs persist among tech companies. These reductions span small and large tech firms, suggesting a collective effort to reduce costs and enhance productivity.

For instance, since the beginning of the year, Elon Musk’s Tesla has laid off roughly 10% of its workforce, around 14,500 employees. Moreover, towards the end of January, SAP, a leading German multinational software company based in Walldorf, shed over 8,000 employees, about 7% of its workforce. 

Dell also joined the wagon and trimmed 6,000 workers, resulting in a 5% reduction in its workforce in late March. Cisco and Toshiba round out the top 5 tech layoff companies, with over 4,000 workers forced to leave each company.

The same echoed through tech giant Microsoft, which shed nearly 3000 employees as part of its plan to establish a sustainable cost structure. Many of the cut-off employees came from its gaming division, the Xbox, Activision, and Blizzard workforce.

Unity Software, an American video game software development company, also laid off close to 2000 workers, representing a quarter of the company’s workforce.

In January last year, Google laid off approximately 12,000 employees, constituting 6% of its global workforce, marking the highest layoffs of the year. Since the start of 2024, the company has continued to reduce its workforce by cutting hundreds of employees, including those from its central engineering division and hardware teams, including those involved in its voice-activated assistant. Courtenay Mencin, the company’s spokeswoman, stated that the layoffs aimed to enhance efficiency and overall performance.

Why Tech Firms are Laying off Their Workers?

With the COVID-19 pandemic restrictions from early 2020, major tech giants experienced a surge in consumer demand as people confined to their homes increased spending on new devices and online activities. As a result, companies like Apple, Amazon, Meta, Microsoft, and Google were on a hiring spree, collectively expanding their workforce by over 900,000 employees. However, when the pandemic-induced spike in consumer demand subsided, these tech firms were much obliged to make workforce reductions.

Moreover, many tech companies are currently prioritizing artificial intelligence innovations. As a result, some actively replace their human workforce with AI, while others prefer investing funds in AI development rather than salaries, aiming to boost productivity. Dropbox, Google, and IBM have already declared layoffs linked to AI initiatives.

Meta’s chief executive, Mark Zuckerberg, said this about Facebook:

We had to lay off employees and control costs so we can invest in these long-term, ambitious visions around A.I. We operate better as a leaner company.

Meta’s chief executive, Mark Zuckerberg

Behind these generalities, however, some tech companies are trimming their workforce to orchestrate a short-term rise in market perception to raise their sales. Though often controversial, this tactic is seen as a way to present a more streamlined and efficient operation to investors and the market at large.