4 Feb 2024

Job cuts in 2024: Top Global Tech Companies Slash Over 30,000 Jobs in January Itself; Will Coming Months Bring Further Challenges?

The global tech industry faced layoffs extensively in the previous year, and there hasn't been any improvement in 2024. Reports indicate that over 2,40,000 jobs were lost in tech companies in 2023, with major players like Google, Amazon, Microsoft, Meta, Nokia, Accenture, and others implementing mass layoffs. 

India was also significantly affected, with companies like Paytm, Sharechat, Dunzo, and Byju conducting large-scale job cuts. Experts attribute these layoffs to surplus hiring during the pandemic, high inflation, and poor consumer demand. Despite entering 2024, the trend of layoffs persists.

2023 witnessed a staggering 2,62,595 job cuts 

According to data from tech layoff tracker, 2023 witnessed a staggering 2,62,595 job cuts by 1,189 companies, marking the worst year for layoffs in recent history. This reflected a 50% increase compared to 2022 when the global layoff spree began, with 1,64,969 layoffs by 1,064 tech companies. The trend continues in 2024, with 30,375 employees already laid off by 115 tech firms within the first month.

These companies retrenched staff in Jan 2024

Prominent companies contributing to this wave of layoffs in January 2024 include UPS (12,000 employees), SAP (8,000 employees), PayPal (2,500 employees), Google (1,000 employees in its second undisclosed layoff), YouTube (100 employees), Microsoft (1,900 employees), Amazon (undisclosed), Twitch (500 employees), Discord (170 employees), TikTok (60 employees), Unity (1,800 employees), Wayfair (1,650 employees), Pixar (undisclosed), Salesforce (7,000 employees), eBay (1,000 employees), Vroom (800 employees), Riot Games (530 employees), Audible (undisclosed), Block (1,000 employees), Okta (400 employees), Swiggy (400 employees), Flipkart (1,000 employees), and Wipro (undisclosed).

UPS announced the largest layoff 

UPS, in its fourth-quarter earnings report, announced the largest layoff of 12,000 staff to save $1 billion in costs. SAP detailed a massive restructuring affecting 8,000 employees, emphasizing a shift towards AI capabilities and automation. PayPal plans to reduce its workforce by 9%, affecting 2,500 employees. Google disclosed two layoffs affecting over 1,000 employees, while YouTube laid off 100 employees in a restructuring exercise.

Microsoft continued its trend with 1,900 layoffs at Activision Blizzard and Xbox in January. Amazon laid off several hundred employees in its Prime Video and MGM Studios division. Social media platforms also faced layoffs, with Twitch letting go of 500 employees and Discord sacking 170 people. TikTok fired 60 employees, mainly from sales and marketing.

Beyond these, Unity, Wayfair, Pixar, Salesforce, eBay, Vroom, Riot Games, Audible, Block, Okta, Swiggy, Flipkart, and Wipro also made headlines for significant workforce reductions.

The common thread in these layoffs includes corporate buzzwords like "restructuring," "improving efficiency," "focus on sustainability," and "surplus hiring." However, the underlying reality suggests that online-first companies, which thrived during the pandemic, are now facing challenges as people shift their time and spending to offline institutions.

AI's emergence 

AI's emergence played a role in this scenario, with companies utilizing AI tools to automate tasks, reduce costs, and enhance efficiency. The impact of "pandemic hiring" is expected to subside, but the continuous advancement of AI may reshape the job landscape. 

WEF predicts automation of 85 million job roles by 2025

A 2020 report by the World Economic Forum (WEF) predicted the automation of 85 million job roles by 2025. While this number may seem ambitious, even a small percentage of it becoming reality in the next few years could result in millions losing their jobs. The ongoing layoffs between 2022 and now already approach half a million.

Indian companies are also conducting layoffs

As global tech companies grapple with this crisis, Indian tech firms are not exempt. Swiggy, Flipkart, and Wipro are among the Indian companies conducting layoffs, further contributing to the global workforce reduction trend. With 11 more months left in the year, the impact of these relentless workforce changes is expected to reach significant levels.

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