Tech layoffs continue to roil industry with 32,000 jobs cut

By Antonia Mufarech

The tech industry has started 2024 with another wave of job cuts, paring back even further after widespread layoffs last year.

So far, some 32,000 tech workers have lost their jobs in 2024 according to Layoffs.fyi, a startup that has been tracking job cuts in the industry since the pandemic.

Snap Inc. became the latest example, announcing on Monday that it’s reducing its workforce by about 10 per cent, or around 540 employees. Earlier this month, software company Okta Inc. said it would eliminate 7 per cent of its staff to reduce costs, affecting about 400 employees. The list goes on, including Big Tech employers like Amazon.com Inc., Salesforce Inc. and Meta Platforms Inc.

This year, “tech companies are still trying to correct for their over-hiring during the pandemic surge, given that the high interest-rate environment and tech downturn have both lasted longer than initially expected,” Layoffs.fyi founder Roger Lee wrote in an email.

There have been two main waves of job cuts in recent years, according to Lee. The “early Covid” spike, from the first to second quarters of 2020, and the “interest rate hike” effect, which has been going on since the second quarter of 2022. “This year’s layoffs are typically smaller and more targeted than the layoffs a year ago,” Lee said.

Credit: Bloomberg

Although economic factors are the main reason for tech layoffs, Lee noted that many companies are citing the race for artificial intelligence as a factor, as they are shifting resources to focus on AI talent. According to an analysis by CompTIA, which tracks employment trends in the tech industry, job postings in “artificial intelligence or requiring AI skill increased by about 2,000 from December to January, to 17,479.”

So even as the industry sheds some jobs, it’s also hiring aggressively in others. There were 33,727 active job postings in January, according to CompTIA, the largest month-over-month increase in 12 months.

“I do feel like most of the layoffs have happened, and companies are going to start to rebound,” said Bert Bean, chief executive officer of staffing company Insight Global. “But it’s still very uncertain.” He expects the market to remain that way for about the next two quarters, “until the Fed really comes out and starts to cut interest rates.”