In previous years, a high-paying job in the tech industry was the dream of many. After a turbulent 2023, tech companies’ workforces are now facing an uncertain future as they continue to face the risk of layoffs in 2024.
According to the New York Times, many technology companies have cut staff since the beginning of this year. The video game software company Unity Software (USA) announced that it would cut 25% of 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. The technology group Xerox (USA) also announced that it would lay off 15% of its workforce, equivalent to 3,450 people, in order to restructure its apparatus to save costs.
Alphabet Inc. said it plans to become leaner and more focused as parent company Google lays off about 1,000 employees across multiple divisions, including its voice assistant unit and the teams responsible for Pixel and Fitbit. Central engineering staff are also among the layoffs.
Fitbit co-founders James Park and Eric Friedman also left the company as the tech giant continued to cut costs. 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. Popular language learning and text translation platform Duolingo, with more than 500 million users, decided to cut 10% of its seasonal workforce to replace it with AI technology.
According to the tracking website Layoffs.fyi, technology companies laid off more than 7,500 employees in January. Reuters news agency commented that the new layoffs signal that technology companies will continue to cut many jobs in 2024 as companies focus on investing heavily in generative AI (genAI).
Analysts and industry experts believe that this year’s layoffs will be more targeted. Meanwhile, major technology corporations assert that the peak of layoffs has not yet come and that they will restructure their workforce even more strongly in 2024 to save costs and operate more efficiently.
The wave of layoffs comes despite a strong U.S. labor market and low unemployment in the world’s largest economy . But the environment for job seekers is worsening. The Federal Reserve’s campaign to raise interest rates has increased borrowing costs, forcing many businesses to reconsider expansion plans.
The household savings that have supported Americans’ spending have dwindled in recent years, forcing many to leave their comfortable lives and look for jobs. Meanwhile, businesses are slowing hiring and offering lower wages.
Layoffs.fyi estimates that more than 224,000 tech workers will be laid off in 2023; the figure for 2022 is 164,969. Amazon had the most layoffs (27,410), followed by Meta (21,000), Google (12,115) and Microsoft (11,158).
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