The tech industry is kicking off the new year with a series of job cuts, and it’s happening at the same time as the sector is pouring billions of dollars into artificial intelligence (AI) investments. While concerns about AI tools replacing human jobs have been prevalent, not all of these recent layoffs are directly linked to AI’s impact on the workforce. However, many tech companies have cited AI as a reason for rethinking their workforce numbers.
In the first two weeks of 2024 alone, more than 5,500 tech employees have lost their jobs, according to data compiled by Layoffs.fyi. These layoffs are affecting various roles in both major tech giants like Google and Amazon and smaller startups.
Google and Amazon, for instance, announced significant layoffs this week, impacting hundreds of workers across different business divisions. These job cuts come just months after both companies disclosed multi-billion-dollar investments in AI startup Anthropic. Discord, a popular social platform, is also trimming 17% of its staff. Unity Software, known for technology used in mobile games like Pokémon Go, is cutting 25% of its workforce, and Duolingo has laid off approximately 10% of its contract workers.
These job cuts follow a challenging two-year period for the tech industry, which saw hundreds of thousands of job losses due to shifts in demand brought about by the pandemic. In 2023 alone, there were 262,682 tech industry layoffs, according to Layoffs.fyi, following 164,969 cuts the previous year.
Roger Lee, the founder of Layoffs.fyi, notes that many tech companies are still trying to “correct for their overhiring during the pandemic surge.” The pandemic led to a surge in demand for digital services, prompting the tech industry to embark on a hiring spree. However, as pandemic restrictions eased and macroeconomic uncertainties persisted, the industry faced its most significant workforce reduction since the dotcom bust of 2000.
AI is playing a role in some of these layoffs, with companies like Chegg, IBM, Dropbox, Duolingo, and even Google citing it as a reason for their staffing adjustments. Researchers suggest that AI could impact hundreds of millions of jobs worldwide, though it may also create new job opportunities in the future.
Amid ongoing layoffs, labor advocates and lawmakers have heightened their awareness. Facts indicate a disproportionate impact of these layoffs on specific groups, such as minorities and women. A coalition comprising over two dozen Black lawmakers has voiced concerns regarding the widespread layoffs within the tech industry, emphasizing their disproportionate effects on the African American community and women. They have formally urged the Department of Labor to intensify its scrutiny of these ongoing mass layoffs and enhance protections for the workers most susceptible to job loss.
The tech industry’s ongoing job cuts and its simultaneous investment in AI technology highlight the complex challenges facing the workforce as it navigates the changing landscape of technology and automation.
