Massive layoffs in the global tech industry in 2024 with over 2 Lakh jobs lost; Here’s the reason

According to reports, nearly 2 lakh jobs were lost in major tech companies in 2023

Layoffs, Job Cuts, Employment, IT Jobs, -

It’s a tough market in the employment sector with big companies like Google and Microsoft laying of lakhs and lakhs of employees over these past 2 years. According to reports, nearly 2 lakh jobs were lost in major tech companies in 2023. Major companies like Google, Microsoft, Nokia, Meta etc. were in big part responsible for these layoffs. India was not exempt as companies like Paytm and BYJU’s also carried out a lot of job cuts.  

 

According to data compiled by Layoff.fyi, 1190 tech companies carried out layoffs with more 2,62,765 employees losing their jobs in 2023. This was a nearly 50% increase from 2022, where nearly 1,65,269 employees were laid off from 1065 tech companies. The trend continues into the new year however as 123 companies have laid off 32,496 employees in just the first month.

 

The ominous threat of layoffs was further amplified as Google made two separate announcements in January announcing even more layoffs. The first targeted over 1,000 employees associated with its subsidiaries like Pixel, Fitbit, Nest and Google Assistant. The second was a report by Business Insider that claimed that an internal memo was circulating in the Google Headquarters which would impact the sales and advertising units of the company, with the cause speculated to be the company focusing more on its AI-based projects.

 

Amazon had also made announcements to lay off about a 100 of its employees in the Prime and MGM division. Microsoft also joined the trend laying off about 1,900 employees at its newly acquired, Activision Blizzard and Xbox which constitutes about 8% of its gaming division. Social Media platforms also felt the impact with Twitch revealing a dismissal of about 500 employees and Discord letting go of 170 of its employees, which is nearly 17% of its workforce. TikTok also let go of 60 of its employees from sales and marketing according to a report by NPR.

 

The trend was also seen in India with online-food delivery company, Swiggy, laying off 400 of its employees, which constitutes nearly 6% of its workforce. Walmart-owned Flipkart is also rumoured to be considering laying off 1,000 employees in an annual restructuring practice, according to reports. Wipro also joined in, announcing on January 31 its intent to dismiss “hundreds of on-site mid-level roles” according to a report by the Economic Times.

 

During the pandemic, several companies hired tens and thousands of employees as they were driven online. But the effects of ‘pandemic hiring’ are now catching up as several IT workers are now losing their jobs in the booming job market 3 years on from the pandemic. The impact of ‘pandemic hiring’ are expected to reach a saturating point as the tech firms have announced massive layoffs since 2022.

 

One major cause of these layoffs has emerged to be Artificial Intelligence. Advancements in its field has provided the company with an additional avenue to cut costs and increase efficiency. The popular innovations in 2023 mainly focused on this field that wasn’t yet fully explored. But the AI-tools are expected to become more refined and mainstream in the coming years infiltrating a broader array of industries. Google, for instance, is already experimenting with AI models for music generation (MusicLM), image generation (Vertex AI), and text-to-video generation with realistic motion (Lumiere).

 

A 2020 report by the World Economic Forum says that workforce automation driven by technology could result in as many as 8,50,00,000 jobs displaced by 2025. As ominous as that may sound, all is not lost however as the prominence of AI also opens up new avenues of employment. Experts say that as generative AI continues to evolve, new job roles will emerge that center around guiding, refining, and interpreting AI – not to mention integrating its capabilities into various sectors. Rather than replace human workers, generative AI is going to create a new need for skilled workers – professionals with the ability to manage and get the best out of generative AI.


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