In 2024, the IT industry had been eagerly anticipated to stage a remarkable recovery after enduring two years of substantial layoffs. Despite early signs of industry resurgence and the Gartner-forecasted 8% surge in global IT spending, reaching a staggering $5.1 trillion, the tech job market continued to be marked by turbulence, partly due to the lingering effects of the layoffs initiated in 2023.
The previous year had witnessed a sweeping wave of job cuts in prominent technology giants like Amazon, Cisco, Meta (formerly Facebook), Microsoft, Google, IBM, SAP, Salesforce, and several smaller companies. This upheaval was primarily attributed to a hiring frenzy during the pandemic, as the demand for technology skyrocketed to support remote work and the surging e-commerce sector, subsequently resulting in revenue declines.
According to data from Layoffs.fyi, an online tracker dedicated to monitoring job losses within the tech sector, approximately 262,682 employees found themselves laid off by 1,186 tech companies in 2023. This marked a substantial increase from the 164,969 layoffs recorded in 2022. As 2024 unfolded, 35 tech companies had already initiated layoffs, impacting 5,586 employees.
Among these notable technology layoffs, SAP emerged as a significant player, announcing the impending impact on 8,000 jobs due to a strategic shift towards generative artificial intelligence (genAI). While the precise extent of the layoffs remained somewhat unclear, SAP emphasized its commitment to offering voluntary leave programs and internal re-skilling measures to mitigate the overall reduction in headcount. This restructuring aimed to position the company for a future workforce that leans younger and possesses expertise in genAI. It should be noted that SAP had already executed over 3,000 job cuts in the preceding year.
eBay, the online retail giant, also made headlines by deciding to reduce its workforce by nearly 10%, amounting to approximately 1,000 jobs. The rationale behind this decision stemmed from a perceived imbalance between headcount and business growth. The unique aspect of these layoffs was that they unfolded as all of eBay’s US employees were working from home and were conducted through virtual Zoom meetings. eBay further revealed its intentions to scale back its reliance on external contractors, all in a bid to enhance cost-efficiency. The previous year, eBay had laid off 500 workers in response to a post-pandemic sales slowdown.
Google, a tech juggernaut in its own right, embarked on a series of layoffs in various departments. Several hundred employees were let go from Google’s ad sales team, a move aligned with the company’s strategic shift towards automating certain job functions through machine learning. Additional workforce reductions affected Google’s digital voice assistant, Fitbit, and Pixel teams. This downsizing trend had originated in January 2023 when parent company Alphabet undertook a 6% workforce reduction across the board, impacting 12,000 employees. Furthermore, Amazon also confirmed its intention to lay off several hundred workers within its Alexa division. This decision was driven by a broader strategic focus on generative AI, aimed at aligning resources with customer priorities. These layoffs were part of a series of job cuts within Amazon, particularly affecting its devices and services team, which includes the Echo devices and Alexa. This team had already experienced the brunt of 18,000 job cuts at the outset of 2023.
In conclusion, despite early optimism for a rebound in the IT industry in 2024, the sector continued to grapple with ongoing layoffs in major tech companies. The root of this turbulence could be traced back to the pandemic-induced hiring surge, which necessitated ongoing adjustments to address evolving market dynamics. Additionally, a significant focus had shifted towards emerging technologies like generative AI. For both companies and employees, adaptation and preparedness remained crucial in navigating the challenges and opportunities presented by this ever-changing landscape.
