The Surge in Tech Layoffs 2024: Who’s to Blame?
Image by Unsplash
A month into 2024 and I’ve never seen my LinkedIn profile so busy with ‘Open to Work’ banners and posts. 2023 was already tough, with a lot of companies announcing layoffs, and what’s even sadder is that the layoffs were quite brutal. Some were told ‘You’re fired, see you later’, and others weren’t even paid what they were owed – it was all a mess.
They say the start of 2024 always has the remaining 2023 energy in it – so the layoffs in 2024 continue.
Naturally seeing tech layoffs will make you very uncomfortable. You start to feel unsure about the security of your job and if you should do the smart thing and start looking for something new. But then the thought of entering another tech company who may restructure or go bust too.
Yes, your head is probably spinning on what to do.
According to Crunchbase, at the end of Jan. 19, 2024, at least 2,215 U.S. tech sector employees were laid off. In 2024 as a whole. at least 6,505 workers at U.S.-based tech companies have lost their jobs so far in the year – and it’s just started!
So what is going on?
The Tech Pandemic
During the Covid-19 pandemic, the tech industry was booming like crazy! You saw every person and their dog transitioning into the tech industry, with very generous salaries and nice benefit packages. Jobs were opening up left, right and centre and people were loving it – they finally found their dream job!
People were stuck at home, WFH became the new best thing, and companies had more money as they were not spending so much on office space, team meetings, etc. The hiring spree starts, with companies loving the fact that their team is expanding!
The tech hiring spree was short-lived with people getting laid off in 2022, 2023, and now 2024.
365 data science did some digging using data analysis to figure out the root cause of all the tech layoffs, and this is what they found:
Image by 365 data science
As you can see from the visualization, the majority of layoffs were within HR and Talent Resourcing – which is no shock as at one point they were very much needed for the hiring spree. The second majority was software engineers, then marketing, and so on.
The data also showed that between 2022-2023, 56% of layoffs were women, 48% were aged between 30-40, 89% were US-based, and 60% of them held a bachelor’s degree.
How do you win right?
Is AI Taking Over?
It’s what we’re all thinking. It can’t be a coincidence that in the past few years, AI has really taken off and people are starting to lose their jobs. Or is it?
Take your local supermarket for example, in the past few months I have seen more automated self-checkouts than I have ever before. The till sections have been heavily reduced and replaced with self-checkout tills.
If we go back to 365datascience’s findings, the majority of layoffs were within HR and Talent Resourcing. Some of the day-to-day tasks within these sectors have been heavily replaced with automation. Companies are integrating a lot of tools and software that are being used to handle manual tasks done within HR. Is this the reason why HR and Talent Resourcing was at the top of the list?
But what does that mean for the other sectors? Why are they getting laid off?
Personally, I believe the other sectors are dealing with the aftermath of the tech hiring spree during the pandemic and as we are going through the possibilities of a recession, companies are struggling to keep financially afloat. This means all those who were hired during the tech hiring spree or are too expensive to keep have to be let go.
If you’re working in the tech industry, you’re probably worried about the security of your job – it’s very normal and I don’t blame you. But you can always protect yourself and this is how.
If your company has announced a hiring freeze across the company, this is normally a good indication that the company is either financially struggling or just about to make ends meet.
Another indication is your workload. If you’ve started to see your workload heavily decrease and projects getting cancelled. This is something that a lot of people don’t initially pick up on at first, but the truth is that C-suite members don’t have the time or finances to start new projects as they are trying to put together all the pieces of the future of the company and how to keep it going.
I urge you to take this with a pinch of salt as these reasons may not highly indicate that the company is going through a rough time and layoffs are pending. It could also mean that the company is dealing with other things that they are prioritizing.
It’s a tough time for tech employees at the moment and with that being said, I think every tech employee should remind themselves that these tech layoffs are not personal and unfortunately out of our reach. These tech layoffs have included the most experienced members, and they were still laid off.
If you are feeling really unsure, the advice I would give is always upskill to prepare yourself for the worst and always have a plan B if your company is showing signs of financial difficulty.
Nisha Arya is a Data Scientist and Freelance Technical Writer. She is particularly interested in providing Data Science career advice or tutorials and theory based knowledge around Data Science. She also wishes to explore the different ways Artificial Intelligence is/can benefit the longevity of human life. A keen learner, seeking to broaden her tech knowledge and writing skills, whilst helping guide others.