The tech industry had a rough start to 2024. Technology companies worldwide saw a significant reduction in their workforce in the first quarter of 2024, with over 57 thousand employees being laid off. By the second quarter, layoffs impacted more than 43 thousand tech employees. In the final quarter of the year around 12 thousand employees were laid off. Layoffs impacting all global tech giants Layoffs in the global market escalated dramatically in the first quarter of 2023, when the sector saw a staggering record high of 167.6 thousand employees losing their jobs. Major tech giants such as Google, Microsoft, Meta, and IBM all contributed to this figure during this quarter. Amazon, in particular, conducted the most rounds of layoffs with the highest number of employees laid off among global tech giants. Industries most affected include the consumer, hardware, food, and healthcare sectors. Notable companies that have laid off a significant number of staff include Flink, Booking.com, Uber, PayPal, LinkedIn, and Peloton, among others. Overhiring led the trend, but will AI keep it going? Layoffs in the technology sector started following an overhiring spree during the COVID-19 pandemic. Initially, companies expanded their workforce to meet increased demand for digital services during lockdowns. However, as lockdowns ended, economic uncertainties persisted and companies reevaluated their strategies, layoffs became inevitable, resulting in a record number of 263 thousand laid off employees in the global tech sector by trhe end of 2022. Moreover, it is still unclear how advancements in artificial intelligence (AI) will impact layoff trends in the tech sector. AI-driven automation can replace manual tasks leading to workforce redundancies. Whether through chatbots handling customer inquiries or predictive algorithms optimizing supply chains, the pursuit of efficiency and cost savings may result in more tech industry layoffs in the future.

As of January 2024, the tech startup with the most layoffs was Amazon, with over 27 thousand layoffs, across five separate rounds of layoffs. It was followed by Meta and Google with around 21 thousand and 12 thousand job cuts announced respectively.

Layoffs in in the technology industry

Overall, layoffs across all industries began in 2020 due to the outbreak of the coronavirus (COVID-19) pandemic, with tech layoffs increasing in 2022. In the first quarter of 2023 alone, more than 167 thousand employees had been fired worldwide, a record number of job cuts in a single quarter and more than all of the layoffs announced in 2022 combined, marking a harsh start to of 2023 for the tech sector. From retail to finance and education, all sectors are suffering from this widespread downsizing. However, retail tech startups were hit the most, with almost 29 thousand layoffs announced as of September 2023. Most job losses happened in the United States, where tech giants like Amazon, Meta, and Google are based.

Reasons behind increasing tech layoffs

Layoffs in the technology sector started with the COVID-19 pandemic in 2020 when entire cities were in lockdown and mobility was restricted. Although restrictions loosened up in 2021, events such as the Russia-Ukraine war, the downturn in Chinese production, and rising inflation had a significant impact on the tech industry and continue to represent major concerns for tech companies. As a consequence, companies across the world have yet to overcome all economic challenges, examples of which are rising material and labor costs, as well as decreasing profit margins. To address such difficulties, tech companies have appointed business plans. For instance, in the United States, tech firms planned to focus more on consumer retention, automating software, and cutting operating expenses.

Percentage of workforce laid off to adapt to the COVID-19 pandemic, by North American Industry Classification System (NAICS), business employment size, type of business, business activity and majority ownership.

In 2024, the gaming sector experienced a significant number of layoffs because of post-COVID industry contraction which has led to studio consolidation and ultimately, an estimated 14,800 video gaming employees losing their jobs. Additionally, 2023 had also not been kind to the industry, as already 10,500 game developers lost their jobs during industry layoffs during the year.