The year 2024 has brought an unprecedented wave of layoffs in the technology sector, surprising many analysts who expected a stabilization after the first few months of the year. Despite an initial wave of large-scale layoffs — with over 32,000 employees being laid off in the first few days — the trend has continued and, in some cases, intensified. This phenomenon is affecting tech giants as well as emerging and medium-sized companies worldwide.
The layoffs in the sector are being driven by a combination of factors, including the need to adjust operational structures and focus on emerging areas such as artificial intelligence (AI). Companies are restructuring their teams to optimize costs and reallocate resources to strategic areas, often replacing traditional roles with automated options or reducing staff in less prioritized areas. This translates to a significant reduction in workforce in some cases, even as new jobs are being created in other areas.
While these layoffs are not directly linked to post-pandemic adjustments or interest rate hikes that affected previous years, they reflect a transition towards new business and technological priorities. This restructuring process could have lasting implications on employment within the tech sector.
Dismissals in the first quarter of 2024
The beginning of the year was marked by significant layoff announcements in various tech companies. Okta, a prominent software company, confirmed a 7% reduction in its workforce, impacting about 400 employees. Snap also made significant cuts, laying off 10% of its workforce, equivalent to 540 people. Veeam and Unity followed this trend, with layoffs of 300 and 25% of their staff, respectively.
Amazon carried out layoffs in its Health, Pharmacy, and Twitch divisions, affecting several hundred workers. Google also joined the wave of layoffs, reducing staff in key areas such as assistants and hardware management. Microsoft, eBay, Salesforce, and SAP made significant cuts, affecting thousands of employees in total. Dell shut down its autonomous car project and laid off 614 people, while Apple reduced its workforce by over 6,000 after abandoning its autonomous vehicle project.
Dismissals in the second quarter of 2024
The period between April and June continued the trend of layoffs in the tech sector. Google continued with cuts in various teams, while Tesla announced a 10% reduction in its workforce, affecting approximately 14,000 workers. TikTok and AWS (Amazon Web Service) also made adjustments, laying off employees in their marketing and operations divisions. Microsoft continued its restructuring, impacting game studios like Bethesda, and ByteDance laid off 450 employees in its e-commerce area.
In June, Microsoft and Google made further cuts in their Hololens, Azure, and Google Cloud areas. Despite the decrease in the intensity of layoffs, the situation remains concerning.
July and August: a mixed outlook
July showed a slight decrease in the number of layoffs, with some minor reductions in medium and small companies. For example, Kaspersky had to close its US division due to economic sanctions. However, August brought a new wave of layoffs. Intuit announced the departure of 1,800 workers, Salesforce reduced its workforce by 300, and OpenText laid off 1,200 employees.
The biggest wave of layoffs in the month came from Intel, which announced the reduction of 15% of its workforce, equivalent to 15,000 employees. This decision was due to the lack of expected revenues and the insufficient profits from emerging technologies like AI.
Outlook for 2025
As the end of 2024 approaches, the situation in the tech sector remains uncertain. Current trends suggest that 2025 may not be better and that we could face more layoffs in the near future. The need to adjust business structures and prioritize new development areas, such as AI, could lead to a continuation of workforce reductions. The coming months will be crucial in determining whether the trend of layoffs stabilizes or intensifies, depending on financial results, restructuring plans, and shareholder attitudes in the tech sector.