Looking at the firms like Twitch, Google, Amazon, Duolingo, and Amazon that announced staff cutbacks in the first two weeks of January, it looks like the large layoffs that have happened in the tech sector over the previous two years will continue in 2024.
As of Monday, January 15, 48 IT businesses had dismissed nearly 7,500 people worldwide, according to statistics from the website tracker Layoffs.fyi.
Nevertheless, the causes behind the present round of layoffs differ from those that brought about the ones in 2022 and 2023.
Many IT businesses that made significant investments during the pandemic that did not turn out have had to shrink significantly since the globe escaped from COVID lockdowns two years ago.
Many of these enterprises went on mass hiring since, during the epidemic, so much business was conducted online. But soon after these recruiting sprees, there was a downturn in the economy and problems with the supply chain, forcing many of them to cut employment in order to survive.
However, this year’s forecast for the global economy is not as bleak. Actually, a number of IT firms have reported striking financial results lately. So why the tech industry still let go thousands of workers?
Experts assert that the present wave of layoffs is primarily due to the development of artificial intelligence (AI) and a “obsession” with efficiency.
Let’s take a closer look at a couple of these factors and how these layoffs may affect the IT industry overall.
Obsession with Efficiency
Mark Zuckerberg, the founder and CEO of Meta, declared 2023 to be the “Year of Efficiency” and revealed that the company would be restructuring to “improve organisational efficiency, dramatically increase developer productivity and tooling, optimise distributed work, garbage collect unnecessary processes, and more.”
Several IT businesses followed Meta’s lead and laid off 10,000 employees in the previous year. The sector as a whole let go of up to 262,000 employees last year.
Into the new year, this fixation with efficiency remains intact. It’s possible to view the current wave of layoffs by many internet businesses as “social contagion” or copying behavior.
In a network, the habit spreads across companies that essentially copy each other’s acts. It’s possible that if a few businesses terminate employees, others will follow suit.
AI’s success
In keeping with their move toward efficiency, businesses are refocusing their resources on cutting-edge technology like artificial intelligence (AI).
A CNN article claims that at the end of the previous year, Duolingo let go of a few contractors to create room for changes using artificial intelligence in the production and dissemination of material.
Luis von Ahn, the company’s CEO, wrote a letter to shareholders in November stating, “Generative AI is accelerating our work by helping us create new content dramatically faster.”
Similar explanations for the recent layoffs offered by Google when it decreased the number of its expanded hardware development team.
Google is spending properly in both the significant possibilities that lie ahead and its core priorities.
Even while it might seem inevitable that work would be replaced by AI, people will still need to be employed; AI will only need to be more proficient. Over the previous year, the number of AI-related employment climbed five to 10 times.
The New Normal
The experts predict that the stories of regular changes within firms won’t go away and may even indicate a “new normal” where layoffs are commonplace.
Mass layoffs are a sign of a systemic change. Layoffs will nonetheless happen despite these trends since they are an unavoidable part of the business. Looking at the firms like Twitch, Google, Amazon, Duolingo, and Amazon that announced staff cutbacks in the first two weeks of January, it looks like the large layoffs that have happened in the technology sector over the previous two years will continue in 2024.
