The global tech industry is grappling with a formidable challenge as unemployment shows no sign of abating. In 2023, a staggering 1,186 tech companies worldwide bid farewell to 262,582 employees. Surprisingly, in just 15 days of the New Year 2024, 48 tech companies have already initiated layoffs, affecting 7,528 employees, as reported by the layoff-tracking website Layoffs.fyi. These figures portray a concerning picture for the affected companies and the burgeoning number of job seekers within the tech industry.
Notably, India played a crucial role in the global tech industry’s layoffs in 2024, accounting for a substantial 16% of the total. In particular, two major Indian companies, Flipkart and Inmobi, streamlined their operations by letting go of 1100 and 125 employees, respectively, in January 2024. These strategic workforce adjustments accounted for 5% of each company’s total workforce, reflecting a proactive approach to cutting operational costs and adapting to evolving business dynamics.
On a global scale, Google, Unity, and Flipkart emerged as the top three tech companies with the highest number of employee layoffs this year. The magnitude of their impact was significant, with each of these companies letting go of 1,000 or more employees.
Alphabet’s Google has officially acknowledged substantial workforce reductions this year, affecting hundreds of employees across teams dedicated to its digital assistant, hardware, and engineering projects. We can expect more layoffs in the coming months.
Unity Technologies, a US-based video game development company, has announced the termination of approximately 25% of its workforce, or 1,800 employees. In a memo addressed to the employees, interim CEO Jim Whitehurst explained that the decision was driven by the need to focus on the company’s core business and ensure long-term success and profitability.
Adding a unique dimension to this trend, Frontdesk, an online rental platform, became the first tech startup to execute layoffs in 2024. This move made headlines as, on January 6, 2024, the company swiftly fired its entire 200-person workforce through a “two-minute Google call.” The firing decision was driven by the company’s unsuccessful attempts to secure additional capital.
In a communication to employees, CEO Jesse DePinto revealed that Frontdesk would be filing for a state receivership as an alternative to filing for bankruptcy. A state receivership is a legal mechanism that allows a company to restructure and manage its debts while avoiding the formal process of bankruptcy. This development underscores the challenges faced by tech startups in managing financial viability and the tough decisions they make to navigate turbulent business landscapes.
Other Main Highlights: Tech Layoffs 2024
Thus far, in 2024, several additional tech companies have disclosed plans for workforce reductions.
Amazon Audible: The online audiobook and podcast service has decided to fire about 5% of its workforce, representing 100 employees. In a communication to the staff, Audible CEO Bob Carrigan expressed confidence in the company’s overall standing but cited the need for layoffs as a strategic move “to position us for continued success in the coming year and into the future, given the increasingly challenging landscape we face.”
Amazon Prime Video: Amazon has revealed plans to lay off several hundred employees working at its Prime Video and Amazon MGM Studios in the Americas.
Amazon’s Twitch: The livestream platform is reportedly set to reduce its workforce by 35%, impacting about 500 workers. This move follows a previous round of massive layoffs in March 2023, where over 400 employees were let go, as user and revenue growth fell short of expectations.
Discord: The social chat and messaging startup has informed its employees about a 17% reduction in its workforce, affecting approximately 170 jobs. The internal memo, sent by founder and CEO Jason Citron, outlines the company’s strategic decision to streamline operations.
Xerox: The company will terminate 15% of its workforce, equivalent to approximately 3,075 employees, in the first quarter of 2024. This strategic decision is part of a broader initiative aimed at introducing a new organizational structure and operating model within the company.
In a Nutshell
In 2023, the global tech industry witnessed a nearly 60% YoY increase in layoffs, while the number of companies executing these layoffs rose by nearly 12% YoY. Analysts and investors linked this surge to the lingering impacts of the Covid-19 pandemic, resulting in significant financial setbacks, including business losses, segment closures, and operational challenges. This tough phase was expected to ease down in 2024. However, the new year 2024 does not appear to bring immediate relief for both companies and employees.
Due to funding constraints and a strategic pursuit of profitability, numerous companies decided to bid adieu to underperforming employees. Additionally, the integration of new-age technologies such as Artificial Intelligence (AI) and Machine Learning (ML) has replaced certain traditional job roles in the tech industry.
Therefore, tech professionals are strongly advised to adopt a proactive approach in 2024. Instead of merely chasing salary hikes, the real game-changer lies in prioritizing job stability.
Additionally, in the era of AI and ML-driven automation reshaping the workforce, the past year has witnessed the creation of numerous job opportunities. Therefore, jobseekers and existing tech employees must recognize the paramount importance of adaptability and upskilling for survival in this ever-evolving tech industry.