- Data from Layoffs.fyi reveals a sharp rise in tech layoffs. Already in 2024, 283 companies have cut 80,898 jobs, impacting companies like Tesla and Amazon, as well as startups.
- Layoffs span industries, from self-driving cars (Motional) to battery development (Enovix), and even gaming (Microsoft’s Arkane Austin closure).
- The ramifications extend beyond numbers. Layoffs strain local economies, challenge innovation with talent loss, and harm employee mental health.
As data from Layoffs.fyi starkly illustrates, the tech sector has witnessed a marked escalation in job cuts. As we delve into the intricacies of this trend, it becomes evident that the ramifications of tech layoffs extend far beyond mere numbers, prompting urgent reflections on resilience and the welfare of those impacted.
Current status of tech layoffs
According to data compiled by Layoffs.fyi, the online tracker keeping tabs on job losses in the technology sector, 1,186 tech companies laid off about 262,682 staff in 2023, compared to 164,969 layoffs in 2022. In 2024, 283 tech companies have already laid off 80,898 employees. Companies like Tesla, Amazon, Google, TikTok, Snap and Microsoft have conducted sizable layoffs in the first months of 2024. Smaller-sized startups have also seen a fair amount of cuts, and in some cases, have shut down operations altogether.
In May, Motional, a self-driving vehicle company, is undergoing companywide layoffs amid a strategic restructuring with approximately one third of the company’s total employees impacted. Battery developer Enovix laid off roughly 170 workers, impacting a third of its total headcount, in an effort to cut back on annual operating costs. Microsoft closed Arkane Austin, Tango Gameworks, and more game studios as part of cuts at Bethesda. Luminar is slashing its workforce by 20%. The cuts will affect around 140 employees, and the company is also cutting ties with “the majority” of its contract workers. Sprinklr has laid off about 3% of its workforce, impacting 116 people.
In April, Google has laid off at least 200 employees from its “Core” organisation, which includes key teams and engineering talent. Tesla has gutted its charging team in a new round of layoffs, CEO Elon Musk announced in an overnight email to executives. Getir has shut down operations in the U.S., the U.K. and Europe, impacting at least 6,000 jobs across the closing markets. The space and defense startup True Anomaly laid off nearly 30 people, accounting for about 25% of its workforce, due to “duplication of roles and functions across the company,”
In March, IBM unveiled significant job cuts in its marketing and communications division. Grammarly downsized its staff by 230 to focus on transitioning towards AI-enabled workplace solutions. Apple ceased its autonomous car division, affecting up to 1,400 employees, as it terminated the electric car project and redirected its attention to other technological innovations.
Also read: Dell layoffs hit 13,000 in 2023, double the number claimed
Impacts of tech layoffs
Tech layoffs can have far-reaching economic implications, affecting not only the individuals directly impacted but also the communities and industries they are part of. Reduced consumer spending and confidence may follow as laid-off workers tighten their budgets, impacting businesses reliant on consumer demand. Local economies that heavily rely on the tech sector may experience downturns, with decreased tax revenues and potential strains on social services.
Losing skilled employees due to layoffs can deplete a company’s talent pool, hindering innovation and future growth prospects. The departure of experienced personnel may lead to knowledge loss, impacting the continuity of projects and the transfer of institutional knowledge.
Layoffs can take a significant toll on the mental well-being of affected employees, leading to increased stress, anxiety, and uncertainty about the future. Employee morale within surviving teams may suffer, as remaining staff grapple with survivor guilt, fear of future layoffs, and increased workloads.
Tech layoffs can damage a company’s reputation, leading to negative perceptions among customers, investors, and partners. Stakeholder trust may erode as layoffs signal financial instability or mismanagement within the organisation, impacting long-term relationships and strategic partnerships.
Also read: Reasons behind mass layoffs at tech companies
Future prospects and mitigation strategies
According to Randstad RiseSmart’s Global Severance report, the global employment landscape is witnessing a profound transformation, with a staggering 96% of organisations having already undergone some form of downsising in the past year. This underscores the extensive impact of economic hardships and evolving business strategies. What’s even more concerning is that 92% of these employers are anticipating further reductions in their workforce in 2024.
The survey findings reveal a crucial gap in how prepared organisations are; many lack robust strategies or resources to adequately support their employees through these upcoming job cuts. This situation underscores the urgent need for more comprehensive severance and transition plans, prompting questions about the long-term effects on workforce morale and the broader socio-economic landscape.
While AI is undoubtedly improving efficiency in areas like software development and IT operations, it faces challenges with tasks requiring human intuition and manual skills. Interestingly, occupations least susceptible to AI impact are those grounded in human empathy and physical abilities, such as healthcare, skilled trades, education, and creative fields.
As the role of AI continues to evolve, it should be viewed more as a collaborator than a replacement. Businesses are increasingly turning to AI to enhance efficiency and human experiences, presenting a critical challenge in maintaining ethical standards. Therefore, companies must prioritise employee training in AI-related skills to ensure a workforce that complements AI capabilities. This approach not only protects jobs but also drives the workforce towards a future where technology and human talent work together to foster greater innovation and efficiency.
