Dive Brief:
- The number of layoffs announced by the tech industry so far this year is approaching 100,000, according to data from the website layoffs.fyi.
- Microsoft, Google, Apple, Tesla and TikTok owner ByteDance are among more than 300 tech companies that have announced job cuts since the start of the year, with the total headcount exceeding 98,000, according to layoffs.fyi. The massive layoffs reflect a trend that analysts say at least partially reflects a push by some tech giants to achieve increased efficiency after excessive hiring amid heightened demand for information technology products and services during the COVID-19 pandemic.
- “The big-name companies aren’t struggling for the most part,” Giuseppe Gasparro, a partner & managing director at New York-based consulting firm AlixPartners, said in an interview. “It’s really a re-balancing. The markets are asking them to be more cost-conscious and bottom-line-conscious and very targeted with investments.”
Dive Insight:
More than 57,000 tech layoffs were announced in the first three months of the year, followed by over 41,000 so far in the second quarter, according to layoffs.fyi. The combined total so far this year represents a slowdown compared with the more than 200,000 jobs that were shed by the industry during the first half of 2023, according to the data.
Most recently, ByteDance is eliminating about 450 jobs at its Indonesian e-commerce unit in the first round of cuts since combining its TikTok Shop with local rival Tokopedia in January, Bloomberg reported last week. And earlier this month, Microsoft confirmed plans to slash 1,000 jobs in its mixed reality division, according to CNBC
The continued tech cuts come as a recent report found that more senior executives across a range of industries, including financial services, industrial products, and health as well as tech, are bracing for reorganizations, including layoffs. Four in 10 executives are planning a major restructuring of their firm’s operating model in the next 12 to 18 months — up from 24% last August, according to Big Four firm PricewaterhouseCoopers’ Pulse Survey unveiled last week, as previously reported by CFO Dive.
To enhance performance, business leaders are looking for opportunities to invest in new technologies like artificial intelligence as opposed to focusing on cost-cutting measures alone, according to the PwC report’s findings.
“The combination of tech investment and operating model reorganization may signal that companies are moving beyond headcount cuts of the past and looking for ways to improve worker productivity,” the report said. “This basically equates to doing more with less, but it will likely require continued tech investment to make it possible.”
Across the economy, U.S. companies announced 322,043 job cuts from January through April, down 4.6% from the 337,411 announced in the year-earlier period, according to a report by business and executive coaching firm Challenger, Gray & Christmas.
AI was cited as the reason for 800 layoffs in April, the highest total since May 2023, when Challenger began tracking job cuts driven by the technology, the report said.
