According to recent data from Layoffs.fyi, over 90,000 tech employees have lost their jobs between January and May 2024.
The data revealed that the layoffs were carried out by 317 companies, comprising 96,551 laid-off employees, which is half the number reported during the same period last year.
Job cuts recorded in January saw over 31,000 employees laid off. April recorded 22,000 layoffs slightly more than the 20,000 reported in April 2023. The layoffs continued in May with 9,654 job cuts, which is 5,000 fewer than the number in May 2023.
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The transportation sector is reported to have recorded the hardest hit in 2024, accounting for one-fifth of all tech layoffs. The sector reported over 17,500 job cuts year-to-date, a 70% increase compared to the same period in 2023.
The hardware industry followed with nearly 10,000 layoffs in the first five months of the year. The consumer and retail sectors also saw significant cuts, with 7,750 and 7,720 layoffs, respectively. Statistics also reveal that the cumulative number of job cuts in the tech sector has reached alarming levels. Since the beginning of 2021, tech companies have laid off more than 720,000 people.
The tech layoff wave has however continued to surge following a significant workforce reduction in previous years. In the year 2022, 165,269 employees were laid off from 1,064 tech companies. In 2023, 263,180 employees were laid off conducted by 1,191 tech companies.
In 2024, 96,551 tech employees have so far been laid off, conducted by 321 tech companies. Companies like Amazon, Google, TikTok, and Tesla, amongst others, have conducted sizable layoffs in the first months of 2024.
Factors Driving the Layoffs
1. Economic Uncertainty:
Global economic instability, influenced by factors such as inflation, geopolitical tensions, and fluctuating markets, has led companies to tighten their budgets. Reducing workforce costs has become a common strategy to weather economic storms.
2. Post-Pandemic Adjustments:
The COVID-19 pandemic accelerated digital transformation, leading to rapid hiring sprees in 2020 and 2021. As the world adapts to a post-pandemic environment, companies are reevaluating their workforce needs, leading to layoffs as they adjust to a new normal.
3. Investment Pullbacks:
Venture capital and private equity firms are becoming more cautious with their investments. The reduction in available funding has forced startups and even established companies to streamline operations and reduce headcounts.
4. Technological Shifts:
Rapid advancements in automation, artificial intelligence, and machine learning are transforming business operations. While these technologies drive efficiency, they also lead to job redundancies, contributing to layoffs.
However, despite ongoing layoffs in the tech industry in 2024, the total number of employees that have been let go in the past five months, is significantly smaller compared to 2023, indicating that the negative trend is finally slowing down.
Notably, the wave of layoffs in the tech industry in 2024 is a stark reminder of the sector’s inherent volatility. While the immediate impact on employees and companies is challenging, this period of adjustment could lead to a more sustainable and balanced industry in the long term.
Emphasizing innovation, reskilling, and adaptive strategies will be key to navigating this turbulent phase and emerging stronger in the future.