The tech industry in 2024 has kicked off with job cuts, marking yet another round of workforce reductions following last year’s widespread layoffs. Approximately 32,000 tech professionals have found themselves out of work already this year, according to data from Layoffs.fyi, an established startup tracking job cuts within the tech sector since the onset of the pandemic.
Snap Inc., the parent company of Snapchat, made headlines recently by announcing a reduction of approximately 10 percent of its workforce, translating to around 540 employees. This decision is part of the ongoing trend of tech companies streamlining their operations and adjusting their staffing levels to better align with market conditions.
Earlier this month, software firm Okta disclosed its intentions to eliminate 7 percent of its staff as a cost-cutting measure, impacting around 400 employees. These moves signal that even established players are not immune to industry-wide shifts.
A broader trend across big tech
Snap and Okta are not alone in their efforts to rightsize their organizations. Several other prominent tech giants, including Amazon.com, Salesforce, and Meta Platforms, have significantly reduced their workforce. These actions come as tech companies continue to address the aftermath of over-hiring during the pandemic’s surge.
Roger Lee, the founder of Layoffs.fyi, note that two major waves of job cuts have occurred in recent years. The first, referred to as the “early Covid” spike, occurred between the first and second quarters of 2020. The second wave, driven by the effects of interest rate hikes, has been ongoing since the second quarter of 2022. Unlike the previous year’s layoffs, this year’s cuts are generally smaller in scale and more targeted.
Economic factors primarily drive tech layoffs, but AI’s emergence plays a significant role in reallocating resources within tech companies. Many are diverting their attention and investments towards AI talent as AI continues transforming various sectors and industries.
According to CompTIA, an organization that tracks tech industry employment trends, job postings related to artificial intelligence or requiring AI skills have increased significantly. From December to January, these postings surged by approximately 2,000 in just one month, reaching a total of 17,479. This highlights the strong demand for AI expertise within the tech sector.
Balancing act: Layoffs vs. new job postings
While tech companies are reducing their workforce in certain areas, they are simultaneously increasing their hiring efforts in others. CompTIA reports 33,727 active job postings in January, representing the most significant month-over-month increase in the past year. This suggests that while layoffs are ongoing, the tech industry is actively seeking to replenish its talent pool.
Bert Bean, CEO of staffing company Insight Global, offers insights into the current market dynamics. He expects the tech job market to remain uncertain for the next two quarters, pending the Federal Reserve’s potential adjustments in interest rates. The industry seems to be in a state of transition, with companies attempting to strike a balance between trimming their workforces and securing the right talent to remain competitive.