Layoffs plagued the global tech industry last year, and 2024 has not seen an improvement so far. As per reports, more than 2,40,000 jobs were lost in tech firms in 2023. The total count included mass layoffs by Google, Amazon, Microsoft, Meta, Nokia, Accenture, and others. India has also suffered its brunt with tech firms such as Paytm, Sharechat, Dunzo, and Byju conducting large-scale job cuts. Several experts highlighted surplus hiring during the pandemic, high inflation, and poor consumer demand as the reason for these firings. But one month into 2024, layoffs are continuing with the same unbridled fervour.
According to data compiled by tech layoff tracker Layoffs.fyi, a total of 2,62,595 employees were sacked in 2023 by 1189 companies. This was the worst year in terms of job cuts in recent history and witnessed an increase of more than 50 percent compared to 2022 (1,64,969 layoffs by 1064 tech companies) when the global layoff spree first started. 2024 has also started in a similar fashion, with 30,375 employees being handed the pink slip by 115 tech firms.
|Total employees fired
|1,000 (second layoff undisclosed)
|December 2023 – January 2024
Notably, the biggest announcement came from logistics giant United Parcel Service (UPS), which revealed in its fourth-quarter earnings report that it was letting go of 12,000 staffers to align resources in 2024. CEO Carol Tomé said the move will save the company $1 billion in costs. The German software giant SAP also announced a massive restructuring exercise affecting a total of 8,000 employees, as per a Reuters report. The firm has said that it will push towards gen AI capabilities and automation, and the employees will either be trained with AI skills or let go through voluntary redundancy programs. Alongside, PayPal, the online payments company, is reported to hand the pink slip to 9 percent of its workforce, or 2,500 employees, to reduce headcount.
After conducting various smaller job cuts, Google has already announced two separate layoffs in January 2024. The first affected more than 1,000 employees across its Pixel, Fitbit, Nest, and Google Assistant teams, as per the company’s statement, and the latter is said to affect a few hundred people in its sales and advertising unit, Business Insider reported. Separately, YouTube also announced laying off 100 employees in a restructuring exercise, initially reported by Tubefilter.
After multiple job cuts in 2023, Microsoft has continued the trend and handed the pink slip to 1,900 employees at Activision Blizzard and Xbox in January, which is roughly 8 percent workforce of the Microsoft Gaming division, as per a report by The Verge. Another tech conglomerate to join the tech giants is Amazon, which has laid off “several hundred” employees in its Prime Video and MGM Studios division, citing shifting of focus as the reason, reported The Information.
Social media platforms were also not untouched by the trend. In 2024, Twitch revealed in a post that it had let go of 500 employees in the company due to the size of the organisation being unsustainable. Discord joined the race by sacking 170 people across various departments, a massive 17 percent of its workforce. CEO Jason Citron cited the reason as overexpanding the workforce in an internal memo obtained by The Verge. Finally, NPR reported that TikTok had also fired 60 employees, mostly from sales and marketing, in January 2024.
Apart from these, several other tech firms also made the headlines for trimming their workforce. Unity, the video game engine developer, revealed in an SEC filing that it was laying off around 1,800 roles to improve its financial performance. Wayfair, the online furniture retailer, was reported to fire 16 percent of its workforce, 1,650 employees, due to going “overboard” with corporate hiring during the pandemic. TechCrunch reported that Disney-owned Pixar is preparing for a round of layoffs that could impact as much as 20 percent of its 1,300 large workforce. Another shocking report came from software giant Salesforce, which is laying off 7,00 employees, as per the Wall Street Journal.
Further, E-commerce platform eBay revealed its plans to sack 1,000 employees, citing the ongoing economic condition. Shutting down its e-commerce used car marketplace on January 22, Vroom laid off 800 people, a whopping 90 percent of its workforce, as per a regulatory filing. Publisher of popular game titles such as League of Legends and Valorant, Riot Games, in a post, revealed that it had handed the pink slip to 530 employees, 11 percent of its workforce, to sharpen its focus on high-impact projects. Amazon-owned audiobook firm Audible also laid off 5 percent of its staff, as per a leaked email obtained by Business Insider.
Block, the Jack Dorsey co-founded fintech firm that owns platforms like Square and Cash App, revealed in a memo obtained by Business Insider that it would be laying off 1,000 employees or 10 percent of its workforce due to growth of the organisation outpacing that of its revenue. Okta, a San Francisco-based identity and access management firm, is reported to fire 400 employees due to high costs.
While the global tech companies were dealing with this crisis, the situation closer to home was not ideal either. Various Indian tech companies also conducted layoffs. Ahead of its planned IPO move, food delivery giant Swiggy was reported to fire 400 employees or around 6 percent of its total workforce, calling it a corporate alignment process. Walmart-owned Flipkart can let go of as many as 1,000 employees in an annual restructuring exercise, as per a report.
And on January 31, just two days ago, Wipro joined the list as it is in the process of sacking “hundreds of mid-level roles onsite” to improve its margins, a report by the Economic Times stated. It is not expected to be the last tech firm this year to lay off employees, and with 11 more months to go, the people impacted by the relentless workforce resizing can reach a scary number.
The common thread in all these layoffs are corporate buzzwords such as “restructuring”, “improving efficiency”, “focus on sustainability”, and “surplus hiring.” But the real picture is clear to see. Most tech firms operate online and immensely benefitted during the lockdowns that occurred during the COVID-19 pandemic. As the revenue skyrocketed, so did the expansion plans and a high number of people were hired. However, now that the pandemic is gone, life is returning to normal, and people are spending time outdoors and in offline institutions. This is not good news for the online-first companies who are losing their business and user ‘time spent’ on platforms to retailers and the real world.
Another big factor that played a role in this was the emergence of artificial intelligence (AI). With numerous AI products and tools to automate tasks within organisations popping up, companies now have another way to reduce expenditure and become more efficient. Notably, Paytm CEO said while announcing a job cut that affected 1,000 employees, “We will be able to save 10-15% in employee costs as Artificial Intelligence (AI) has delivered more than we expected it to.”
The impact of “pandemic hiring” is bound to stop at some point, as the majority of the large tech firms have conducted large-scale layoffs since 2022 and are likely to have brought the workforce under control by now. Startups and MNCs also joined the race in 2023, but it can go on for some more time. The one thing which is not going anywhere is the emergence of AI. The launches in 2023 were mostly new products based on a technology that was not fully explored. AI tools are expected to become more polished and enterprise-ready in the next few years and enter a wider range of industries. Google, for example, is already testing AI models for music generation (MusicLM), image generation (Vertex AI), and text-to-video generation with realistic motion (Lumiere).
According to a 2020 report by the World Economic Forum, workforce automation by technology can display as many as 85 million (8.5 crores) job roles by 2025. While the number seems quite unrealistic in 2024, even if just one percent of this comes true in the next five years, 8.5 million (85 lakhs) people will lose employment. To highlight how massive this will be, the entire layoff spree between 2022 and now only amounts to a little less than half a million (4,57,939).
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