The layoffs are seen as a continuation of cost-cutting measures implemented in response to inflation, interest rate hikes, recession fears, and a market downturn in 2022. Despite an improving economic outlook, companies are still downsizing, having learned to do more with less. The trend is not limited to the tech industry, but is particularly noticeable there due to a shift in focus towards developing AI products. As a result, industry experts predict layoffs in other segments will continue into 2024.
Key takeaways:
- Despite record trading for the S&P 500 and Nasdaq, tech companies are downsizing at an increasing rate, with 23,670 workers laid off from 85 tech companies in January alone.
- High-profile companies such as Microsoft, Google, Amazon, and eBay have announced significant layoffs, with Microsoft cutting 1,900 positions in its gaming division and eBay slashing 1,000 jobs.
- Investors have praised the cost-cutting measures implemented by companies in response to economic challenges such as rising inflation and interest rate hikes, leading to a focus on profitability and cost-cutting in large publicly traded companies.
- As tech firms prioritize investments into artificial intelligence (AI), other segments are likely to see layoffs continue into 2024. Some companies are reducing headcount in certain areas to invest more heavily in developing AI products.