Tech layoffs: 25,000 let go in January 2024
"The layoffs seem to be helping their stock prices, so these companies see no reason to stop..."
Tech companies have continued to restructure and let go of staff members in the New Year, with both technical and non-technical staff impacted.
Nearly 100 companies, including the likes of Meta, Amazon, Microsoft, Google, TikTok and Salesforce have collectively let go of about 25,000 employees, according to layoffs.fyi.
Most of this restructuring comes as tech companies try to adapt to a rapidly changing landscape. For example, German software company SAP has announced job changes and buyouts for 8000 employees (7% of its total staff) as it attempts to become more cloud-centric and incorporate "AI driven efficences" into the organisation.
Amazon-owned Audible is letting go off 5% of its staff despite a strong financial performance in 2023. Hundreds of jobs have also been cut at Amazon’s film and television division, while Google has let go of laid off “hundreds” of employees across several divisions, including its engineering and hardware teams, as well as employees developing its voice-operated virtual assistant, Google Assistant.
Amazon owned streaming service Twitch has announced over a blog post that it will be reducing its headcount by 500, while eBay is cutting 1000 staff roles and scaling back contract roles.
Duolingo, the language teaching application, has let go of 10% of its contactors, though it seems that no staff members have been impacted by job cuts so far. Though exact numbers remain unclear, X (formerly known as Twitter) has reportedly cut staff from its global trust and safety tea, Discord, has announced that it is letting go of 17% of its staff.
According to reports, Pixar is going to lay off employees in 2024, with the total impacted employees potentially reaching as high as 20% of the animation studio’s 1,300 person workforce. The cutbacks come as Disney looks to reduce the studio’s output as it struggles to achieve profitability in streaming.
Within gaming, Microsoft and Riot Games are pruning 8% and 11% of their gaming staff respectively. The layoffs at Microsoft, impacting over 1,900 members of staff come after its $69 billion acquisition of Activision Blizzard. Riot Games said that it made the decision to let go off 530 employees as their "costs have grown to the point where they’re unsustainable."
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Explaining the continuing layoffs, "There is a herding effect in tech," said Jeff Shulman, a professor at the University of Washington's Foster School of Business, speaking to NPR.
"The layoffs seem to be helping their stock prices, so these companies see no reason to stop."
Compared to 2023, however these trims are more focused. In January 2023, tech companies had laid off a total of 84,174 employees.
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The herding effect described by Schulman is similar to what the Forbes magazine described as the contagion effect of layoffs in 2023. Once a few firms within a sector lay off workers, it offers cover for other companies to follow suit, the report explained.
Layoffs seem to have become the norm within the sector, with over hiring during the pandemic leading big tech to downsize now, and a funding crunch squeezing fledging start-ups dry. Whether the trend abates through the course of 2024 remains to be seen.