- Since the start of 2024, technology layoffs have spread across the United States, with more than 34,000 workers laid off.
- Jefferies analysts say the layoffs won’t end soon.
- Companies are pouring money into AI and making cuts in other areas to show discipline.
It may seem like a ton of tech companies are laying off employees this year.
That’s because they are, and they show no signs of stopping, according to Jefferies analysts.
“The redundancies are going to continue and it could get much worse. It’s becoming more contagious,” Brent Till said in an interview with the FT published on Sunday.
Google CEO Sundar Pichai had already warned employees that more layoffs were coming in an email to staff last month, after hundreds of layoffs so far this year.
More than 140 tech companies have cut jobs, with a total of 34,250 people laid off since the beginning of 2024, according to technology layoffs tracker Layoffs.fyi.
While that may sound like a high number, it pales in comparison to last February, when tech companies cut a total of 140,000 jobs as the industry grappled with pandemic-era hiring overhangs.
Although the number of employees affected was small this year, the layoffs feel like they will never end, as big tech companies like Amazon and Google consistently make small cuts across a variety of areas. This year, Amazon cut jobs at its Buy with Prime division, as well as Prime Video and Amazon MGM Studios.
Amazon employees are now bracing for more layoffs, following news that up to hundreds of jobs will be cut at One Medical and Amazon Pharmacy.
Additionally, Google has cut hundreds of roles this year across a variety of teams, including the Assistant, knowledge and information product teams, hardware teams, and central engineering.
A Google spokesperson said the company is investing in its “biggest priorities and important opportunities going forward.” Google continues to support affected employees as they explore new roles within the company, the statement said.
While layoffs are common in January, companies that appear to be doing well, such as Microsoft and Meta, which launched major AI platforms and recently reported record profits, are also participating in the cuts, making these layoffs more likely. Many look different.
Microsoft cut 1,900 positions in its gaming division in January, despite reporting record revenue in the final quarter of 2023.
Microsoft Gaming CEO Phil Spencer said the job cuts are part of a larger “action plan” to reduce duplication within the company, CNBC reported.
The FT reported on Sunday that companies may continue to make cuts to invest in new areas such as generative AI. Additionally, tech companies may want to demonstrate to investors that they are focused on cost discipline, according to the same report.
For companies like Meta, this strategy seems to be working well.
Meta announced additional job cuts in January after cutting its workforce by 22% last year. The decision sent the company’s stock price up 12%, to a peak of $450 per share in January.
Meta said it was done with layoffs in 2023, but CEO Mark Zuckerberg has positioned 2024 as the “year of efficiency” and has already eliminated manager positions at Instagram and expanded the role. It is expected that this number will increase.
This strategy could even lead to the revival of the Metaverse, which was previously considered a failure in the world of technology.