Tech Layoffs: A Year of Industry Transformation
In the tech world, 2023 has been marked by a seismic shift, one that has shaken the foundations of even the most established giants. As we explore the events that have transpired, our journey begins with a fundamental question: Is the tech industry's ongoing series of layoffs merely a transient storm, or are we witnessing the emergence of a new norm? Join us as we dissect the reasons behind this disconcerting trend, learn from those who turned adversity into opportunity, and ponder the future that awaits in 2024.
Unveiling the Wave of Layoffs in 2023
Techwide reckoning is still ongoing this year. Over 240,000 jobs in the tech sector have been lost in 2023; this number is already 50% greater than it was the previous year and continues to rise. Although the causes of these layoffs differ from business to business, some prevalent ones are as follows:
- The pressure from investors and shareholders to cut costs and improve profitability.
- The slowing revenue growth and uncertain global economic outlook due to the ongoing pandemic and geopolitical tensions.
- The pandemic has accelerated the adoption and development of AI in many sectors, creating new opportunities and challenges for tech companies.
A Month-by-Month Breakdown of the Layoffs
According to Layoffs.fyi, the running total of layoffs for 2023 based on all months completed to date is 224,503:
- January: 89,554 workers lost their jobs
- February: 40,021 workers lost their jobs
- March: 37,823 workers lost their jobs
- April: 20,014 workers lost their jobs
- May: 14,928 workers lost their jobs
- June: 10,958 workers lost their jobs
- July: 10,589 workers lost their jobs
- August: 9,545 workers lost their jobs
- September saw the layoff of 4,632 workers
Now, let’s take a look at January as the highest layoff month and the recent months of autumn.
January: The Shockwave Begins
- Microsoft fired 10,000 employees.
- Amazon announced the elimination of almost 18,000 positions.
- Spotify fired 600 people worldwide, or about 6% of the company's total employment.
- PayPal laid off about 2,000 full-time employees, or 7% of PayPal's workforce.
September: Ripples in the Industry
- Naughty Dog is laying off at least 25 contract developers.
- Epic Games declared that the company behind Fortnite is letting go of 870 employees or 16% of its staff.
October: The Titans Fall
- Google stated they have eliminated at least 40 positions.
- LinkedIn confirmed that it will eliminate 668 positions, raising the total to almost 1,400 for this year.
- In two of its California locations, Qualcomm is laying off 1,258 employees.
Rising from the Ashes: Success Stories After Layoffs
From here, where does talent in tech go? There are many moving parts to the answer, and labour statistics are still preliminary. Top MBA programs want laid-off workers to join so badly that they're waiving standardized test score requirements, venture capitalists (VCs) want to fund the newest tech mafia startups before banks do, and the tech companies are in a position to hire. Still, there are stories, of when ex-employees succeeded even more after the layoff.
- Alexandra Lee, a former software engineer at Meta, was laid off in October 2023 as part of the company's restructuring of its metaverse custom silicon unit. She then used her skills and experience to create Metafy, a platform that connects metaverse creators and users and allows them to monetize their content and interactions. Metafy has raised $15 million in seed funding and has over 10,000 active users.
- Rajesh Kumar, a former product manager at Google, was laid off in June 2023 as part of the company's efforts to streamline its cloud and AI divisions. He then teamed up with two other ex-Google employees to launch Cloudy, a cloud-based AI platform that simplifies and automates data analysis and machine learning for small and medium businesses. Cloudy has secured $20 million in Series A funding and has over 5,000 customers.
- Maria Gonzalez, a former marketing manager at Spotify, was laid off in April 2023 as part of the company's cost-cutting measures amid slowing revenue growth. She then used her passion and expertise in music to create TuneIn, a social music app that lets users discover, share, and listen to music with their friends and influencers. TuneIn has attracted $10 million in angel investment and has over 1 million downloads.
What to Expect in 2024?
There are numerous forecasts at the moment. Unfortunately, it appears that these trends will persist as we get ready for 2024. "Staff who directly contribute to building, selling, or servicing the company's core product are least likely to be laid off in 2024, while those in middle management and support roles are most vulnerable," stated Nick Gausling, a seasoned business consultant and managing director of Romy Group LLC. However, even engineers and salesmen must exercise caution while working in new or experimental divisions that are unrelated to the company's core business.
Even now, some large corporations are announcing impending layoffs ahead of schedule. For instance, Nokia stated on October 19 that it would eliminate up to 14,000 positions between now and 2026, attributing the layoffs to lower-than-expected earnings. This represents about 16% of the company's 86,000 current workforce.
However, there is a bright side, according to Cliff Jurkiewicz, vice president of worldwide strategy at HR technology company Phenom: "Tech professionals have an advantage." Their skill sets are very marketable because there are so many amazing tech job chances in many industries. Additionally, they possess the experience and know-how to make upskilling for the new AI-based occupations simpler. Furthermore, there will soon be other AI roles; these are only the beginning.
For instance, Meta Platforms Inc. terminated almost 20,000 workers five months ago as a part of a year-long initiative to control expenses and improve efficiency. However, it seems that Meta's cost-cutting efforts are coming to an end. The social media behemoth announced that it intends to increase hiring expenditures in 2024, especially in areas it deems essential, such as revitalizing Metaverse.
The tech industry has experienced unprecedented upheaval in 2023, with layoffs affecting companies of all sizes. The success stories of those who've carved new paths after being laid off remind us of resilience and innovation. As we bid farewell to 2023, one question lingers: Will the trend of tech layoffs persist, casting a shadow over the tech sector in 2024, or will a different narrative emerge? Only time will reveal the answer to this pivotal question.