Tech layoffs
We are in the month of April and big tech companies worldwide are facing increasing layoffs in 2024 as well. Major brands like Apple, Amazon, Snapchat, IBM, Dell and Microsoft are cutting hundreds of jobs across various sectors. According to Layoffs.fyi, in 2023, tech layoffs hit 262,735, up 59 per cent from 2022. This trend continued into 2024, with layoffs starting early in the year.

The report revealed that in January 2024, 19,350 employees were laid off, followed by 15,589 in February and 7,322 in March. Although the layoffs in 2024 haven’t reached the peak seen in the first quarter of 2023, it’s still been a challenging start to the year for the tech industry.

If you look at the major brands, tech giant Apple recently laid off over 600 employees in California as part of its decision to terminate projects related to car development and smartwatch displays. Similarly, IBM recently announced job cuts across its marketing and communications teams.

Ed-tech platform Byju’s is also laying off about 500 employees, accounting for 3 per cent of its total workforce, as part of a restructuring effort. Another major player Dell also confirmed a workforce reduction of around 6,000 employees, marking the second round of layoffs in two years for the company. The Swedish telecom equipment manufacturer Ericsson also fired 1,200 employees due to a decline in 5G network equipment demand.
Multiple reports recently also confirmed that more people in the tech space would be losing their jobs in the coming months. While some reports blame the rise of artificial intelligence (AI) as the main culprit, tech experts equally blame the COVID-19 pandemic for these layoffs.

According to Faisal Kawoosa, founder and chief analyst, Techarc, there are two main factors contributing to these layoffs. Firstly, AI has played a role in some of these workforce reductions. Also, during the COVID-19 pandemic, many tech firms engaged in extensive hiring to meet increased demand while saving costs in other areas.

“This led to an overabundance of employees, particularly in roles such as sales. Now, we’re seeing a correction in the market to return employment levels to normal. It’s about restoring the balance that was disrupted during the pandemic,” Kawoosa, told Times Now Tech.

Prabhu Ram, Head, Industry Intelligence Group at CMR, believes that the recent tech layoffs signal a course correction within the industry, driven by a confluence of post-pandemic realities and a challenging economic climate. Tech giants are streamlining operations to prioritise high-impact initiatives in the face of an AI-powered future.

“While there could be short-term disruptions, enterprises may leverage strategically reposition themselves for more robust long-term growth and the potential to capitalise on new opportunities,” he added.

Sharing similar views, Tarun Pathak, research director at Counterpoint Research told Times Now Tech: “Tech layoffs are becoming a larger part of companies’ cost-cutting strategies as they navigate uncertain times, driven by larger macroeconomic conditions, geopolitical challenges and slowdowns in some sectors.

While each industry may have its own reasons, companies are being extremely cautious about their growth and expansion plans. Additionally, the layoffs are also a consequence of over-hiring during the COVID pandemic, he stressed.