After a whirlwind 2023, the tech industry gained some semblance of stability in 2024. While there were some significant workforce reductions this year, the numbers have been comparatively low suggesting the slowing down of the trend.
The industry witnessed a 42 per cent decline in layoffs compared to 2023, which saw the highest number of job cuts in the last four years. Over 260,000 employees were handed pink slips by over 1,200 companies this year.
The spate of layoffs in 2023 was driven by factors such as economic downturn, considering rising inflation and interest rates. The eventual decrease in consumer spending hit the tech industry which relies heavily on their demand for its products and services. Some other key reasons that prompted companies to cut jobs were the stock market downturn, shifting market dynamics, and largely the over-hiring spree during the pandemic.
After the economic slowdown last year, 2024 saw signs of recovery, or perhaps some increase in demand for tech products and services. This could also be one of the reasons for many tech companies to hire again, retain staff, or even the overall slowing down of layoffs across the industry. In 2022 and 2023, AI was perceived as detrimental to jobs, this year saw it creating some new opportunities. Professionals in areas such as AI development, machine learning, and data science, were in demand across the industry.
On the other hand, compared to 2023, many companies may have already accomplished major restructuring and cost-cutting measures, thereby reducing the need for more layoffs. Moreover, many big tech companies also saw a shift in focus towards long-term growth and innovation, leading to increased hiring in some areas. Companies that laid off their staff have been impacted by economic challenges, strategic realignments, and the increasing integration of AI into their business operations.
Big Tech layoffs of 2024
Intel and Tesla were the big names that let go of the maximum number of their staff. It was a patchy year for Intel, as in August the company announced that it would lay off around 15,000 employees or about 15 per cent of its workforce. The struggling chip giant said the layoffs were part of a plan to reduce costs by more than $10 billion by 2025. CEO Pat Gelsinger said that the layoffs were carried out to address high costs and low margins, and cited Intel’s dwindling financial conditions and aggressive competition in the semiconductor industry. “We plan to deliver $10 billion in cost savings in 2025, and this includes reducing our headcount by roughly 15,000 roles, or 15 per cent of our workforce. The majority of these actions will be completed by the end of this year,” Gelsinger said in a note to employees.
According to reports, the massive layoff by Intel, through voluntary separation agreements, impacted employees in Arizona, Oregon, and California. Reports also said the laid-off employees received up to 60 days’ notice. Incidentally, Gelsinger, the Intel CEO for the last four years, stepped down on December 1 following a board meeting in which the directors felt that his costly plan to turn Intel around was not working and the progress was not fast enough.
This year also witnessed the electric vehicle market becoming increasingly competitive, putting the likes of Elon Musk’s Tesla under severe pressure to maintain its market share and profitability. In April, the EV company commandeered by Musk initiated layoffs impacting as many as 21,473 employees across 50 companies in the tech industry. Reports said the layoffs took place as the company was looking to reduce its workforce by around 10 per cent. In May, the company announced another 600 layoffs in California.
Reports said Musk has cited various reasons, such as weakening demand for Tesla vehicles, increased competition, and fast-paced growth in recent years leading to duplication of roles and job functions.
The 53-year-old was criticised, and Tesla faced intense scrutiny following the announcements. However, Musk was cited as saying that the layoffs will allow the company to be lean, innovative, and hungry for the next growth phase. Several Tesla employees took to their social media and LinkedIn to share the cold emails they got following the announcements. Some of them even shared that Musk’s leadership style could have been a key factor in the high turnover rate.
A closer look at tech layoffs in 2024
Courtesy: Layoffs.fyi
In terms of layoffs, the year saw 619 companies sacking 151,484 employees. Based on data, the number of layoffs seems to be uneven throughout the year, essentially reflecting the changing market dynamics, economic pressures, etc. The year began with 123 companies cutting 34,137 employees. This was mainly driven by cost-cutting measures and strategic alignments undertaken by companies in response to the economic challenges they faced in 2023. In the first quarter, January saw the maximum layoffs, and February and March witnessed job cuts to the tune of 15,639 and 7,403, respectively. This quarter saw tech giants like Google, Microsoft, and TikTok deploying significant job cuts and embarking on various restructuring efforts.
Meanwhile, the second quarter saw a spike, with April recording 22,423 layoffs by 59 companies. This was the second highest since January, and May and June followed with 11,011 and 10,083, respectively. Tech giants like Cisco and Intel announced major reductions to streamline their operations and redirect their resources to new technologies like AI and cybersecurity. The third quarter began with a significant decline as July reported 9,051 job cuts. However, August saw a steep hike with 25,944 job cuts — the second highest figure since January — as tech giants like Meta and AMD implemented realignment strategies prioritising their focus on high-growth areas. September saw a significant dip, with 3,765 layoffs, showing some signs of stability in the tech sector.
The last quarter of 2024 experienced a further decline in numbers. October reported 3,659 job cuts, followed by 5,925 in November, and December ended with 2,268 layoffs, the lowest monthly total of 2024. This consistent downward trend suggests that the tech sector may have adapted to the economic challenges and market shifts that forced earlier workforce reductions.
The year witnessed Tesla and Intel laying off the maximum number of staff from their workforces. (Express Image/FreePik)
Courtesy: Layoffs.fyi
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