Layoff wave extends to 2024: An overview

The year 2024 has not brought the jubilant new beginnings that the businesses, especially the tech industry, might have hoped for. Instead, it has begun with a chilling echo of 2023’s massive job cuts, with major companies announcing layoffs across various sectors. This trend signals a potential “reckoning” for the industry, as it adjusts to a post-pandemic reality of economic uncertainty and shifting priorities.

Major Companies Announcing Layoffs

1. Amazon’s Continued Downsizing

The tech behemoth is firing hundreds of employees across its Prime Video and MGM Studios, citing the need for “increased efficiency” and cost-cutting in underperforming areas. While the exact number of affected employees is unclear currently, with this latest series of layoffs across various divisions, Amazon is continuing a trend that began last year when the company cut over 27,000 jobs.

Additionally, the layoffs also extend to its Twitch service, set to lose about 35% of its workforce or more than 500 employees. Amazon-owned Audible has also announced to trim about 5% of its workforce as the company faces an “increasingly challenging landscape.”

2. Google’s Focus Shifts

Hundreds of roles in Google’s voice-activated assistant and knowledge teams are being eliminated, Semafor reported. This restructuring is part of Google’s effort to integrate new AI technologies into its products, marking a significant shift in the company’s focus. Without specifying the exact number of affected employees, reports noted that the company has given pink slips to employees in its core engineering division, Google Assistant team, and in the hardware division that makes the Pixel phone, Fitbit watches, and Nest thermostat. Last year, Google shed 6% of its workforce, affecting 12,000 employees.

3. BlackRock’s Strategic Reduction

The world’s largest Asset manager, BlackRock, is reducing its workforce by approximately 3%, amounting to around 600 jobs, as the company plans to “reallocate resources” across divisions. The reductions will not concentrate on any particular team, Reuters reported. Despite these cuts, BlackRock anticipates a net increase in its workforce by the end of 2024 driven by hiring in areas like technology and alternative investments.

4. Meta’s TPM Role Restructuring

Meta is reportedly laying off 60 employees, mainly in technical program manager (TPM) roles, offering them the option to reapply for different positions. This move is part of Meta’s broader strategy to streamline its operations. Reportedly, Meta has given these employees until March-end to re-interview for product management or other roles. However, those who could not qualify for the new roles are slated to end their employment in March.

5. Duolingo Adapts to AI

Duolingo has laid off 10% of its contract workers as it shifts towards AI-driven content generation, CNN reported. While not the sole factor, this technological shift played a significant role in the decision, alongside efforts to streamline operations and enhance efficiency. Notably, Duolingo prioritized minimizing direct layoffs by seeking alternative positions for affected individuals wherever possible. Despite these layoffs, the company emphasizes the continued role of human expertise in its operations.

6. Unity’s Major Workforce Reduction

The video game engine maker Unity is laying off another 1,800 employees, about 25% of its workforce in the coming weeks as the company “restructures and refocuses on its core business, and to position itself for long-term and profitable growth.” While the costs and charges, such as employee transition, severance payments, and employee benefits, in connection with this reduction are unclear, Unity expects these will be substantially incurred in the first quarter of 2024.

7. Discord Joining Tech Slump

Discord, the popular gaming-focused chat platform, has announced a workforce reduction, laying off 17% of its employees. This decision affects around 170 staff members across various departments. Discord CEO Jason Citron, as reported by The Verge, explained the move as a strategy to increase efficiency and agility within the company. He acknowledged that Discord’s rapid expansion, with a fivefold increase in staff since 2020, led to less efficient operations and an overabundance of projects. The layoffs, which are the largest in Discord’s history, come after a smaller round of cuts in August last year, where about 40 jobs were eliminated. Despite these layoffs, Discord is not in immediate financial trouble. It has raised around $1 billion in funding, with over $700 million in cash reserves, and is aiming to turn a profit this year. The company, valued at $15 billion in 2021, has been considering going public since declining a $12 billion acquisition offer from Microsoft in 2021.

8. Disney’s Pixar to Shrink

Disney-owned Pixar is bracing for layoffs in 2024, a consequence of prioritizing streaming content and recent box office disappointments like “Lightyear” and “Elemental.” While the exact number remains unclear, TechCrunch report highlighted that up to 20% of Pixar’s 1,300 employees could be affected. This follows 2023’s 75-person reduction as Disney aims to streamline costs and reach streaming profitability by Q4 2024. The shift in focus and audience preferences, including “franchise fatigue,” has contributed to Pixar’s financial challenges. With an “Inside Out” sequel and “Elio” on the horizon, Pixar hopes to prioritize cost-conscious productions moving forward.

A Shift Towards Efficiency and Innovation

These examples paint a concerning picture, especially considering the broader context of rising inflation, interest rates, and a shift toward profitability over growth. With even companies like Google and Amazon feeling the pressure, it is clear that the tech industry is undergoing a significant correction.

The key lies in how these companies handle the layoffs and manage the transition for their departing employees. Providing ample support, severance packages, and resources for reskilling or finding new job opportunities can help mitigate the human cost of this economic shift. Looking ahead, it is likely that the tech industry’s job-shedding will continue in the near future. Other sectors might also experience similar pressures.

However, it is crucial to remember that this is not necessarily a doomsday scenario. The wave of layoffs in the tech industry in 2024 indicates a significant shift toward efficiency and innovation. These layoffs, while painful for those affected, could indicate a necessary adaptation for the industry. By streamlining operations, prioritizing efficiency, and embracing new technologies like AI, the tech sector might emerge stronger and more resilient in the long run. While these layoffs present immediate challenges for those affected, they also signal a transformation in the industry, potentially leading to new opportunities and business models in the long run.