Globally, the tech industry is seeing an increase in workforce cutbacks as companies try to allocate more resources to their artificial intelligence (AI) initiatives.
The tracking website Layoffs.fyi reports that tech companies terminated over 165,000 workers in 2022 and 264,000 in 2023. Four hundred ten tech organizations have let go of over 132,900 workers in 2024.
Based on a distinct examination of over 700 layoff notifications from the technology industry, monitored by the IT jobs website trueup.io, BestBrokers approximated a significantly greater figure: since the beginning of the year, over 165 tech companies globally have laid off 203,946 workers.
Numerous tech companies have clearly connected the increasing use of AI and machine learning in their operations to the current wave of layoffs.
Examples of this include Dell, which is eliminating sales positions to reallocate resources to its AI teams, and Cisco, which is reducing 7% of its personnel while spending $1 billion in companies related to AI.
Meta CEO Mark Zuckerberg says the company is cutting staff “so we can invest in these long-term, ambitious visions around AI.”
Amazon is reducing its workforce by several hundred employees to concentrate “resources and efforts focused on generative AI.”
Intuit is laying off 1,800 employees to provide more funds for incorporating AI into its software products.
Before the company’s shift to AI, IBM CEO Arvind Krishna stated that the company would not be hiring. Mukesh Ambani, the chairman of Indian conglomerate Reliance Industries, which eliminated 42,000 jobs in the most recent fiscal year, characterized AI as “an enabler for achieving a quantum jump in productivity and efficiency.”
“The economic environment is still tight,” Layoffs.fyi founder Roger Lee informed Bloomberg Technology.
“Companies are finding that the only way to increase investment in AI is to cut cost elsewhere and hence all the layoffs that we’ve been seeing.”
While other big companies, such as Alphabet, Microsoft, Salesforce, Sonos, and others, have also been busy simplifying operations, many have not specifically stated AI as a driving driver. Still, there are signs that the industry’s shift to AI has had an effect.
For instance, Google CEO Sundar Pichai stated in an email to staff members dated January 20, 2024, that the tech firm would “remove layers” of its workforce this year to free up finances for “investing in… [the company’s] big priorities.” The truth is that we must make difficult decisions to make this investment possible.
Although Pichai did not specifically address artificial intelligence in the memo, it was sent one month after the business announced plans to invest $2 billion in the generative AI startup Anthropic in October 2023.
Microsoft’s executive vice president of strategic missions and technologies leaked another document following layoffs in its Azure cloud and mixed reality divisions.
Jason Zander wrote: “Our clear focus as a company is to define the AI wave and empower all our customers to succeed in the adoption of this transformative technology. It’s never easy to make these tough decisions, particularly when they affect our colleagues and friends.”
BestBrokers reports that a combination of factors, including overhiring during the COVID-19 outbreak, rising interest rates on businesses, and the spread of AI and automation forcing enterprises to reorganize and reduce their workforces, are to blame for the layoffs.
“Tech firms, in particular, are heavily investing in AI, frequently at the expense of human jobs,” it said.
“Other factors contributing to the ongoing wave of tech layoffs include economic slowdowns, rising inflation, declining stock prices, slowing sales and concerns about a potential recession.”
