#214: Why 2024 Tech Layoffs Could Be Different
#214: Why 2024 Tech Layoffs Could Be Different
As of writing, at least 135 tech companies have laid off more than 33,800 employees, according to layoffs.fyi
Corporate layoffs are, echoing last year, all over the place, from megacaps companies like Google and Amazon to non-tech firms like Citigroup which announced its plans to cut 20k+ jobs over the next two years (10% of its global staff)
On the bright side, this year likely won’t be 2023 again, but with a caution
Misjudged Growth
Along with nearly 240k+ tech jobs cut last year, it's been discovered that tech companies have severely over-hired (to the point that there are idle workers) during the pandemic
Though it was clear that demand for online services grew during the pandemic, mega-giants like Amazon and Meta almost doubling their workforce had to be justified by a corresponding growth rate, which was not actualized
With decade-high interest rates, inflation, and recession fears (and more directly pullbacks in advertising and consumer spending), it’s turned out to be an unsustainable hiring spree the last few years
Shifting Priorities >>> Continued Slide in Jobs
Simultaneously, we’ve had generative AI take over the spotlight, which can inspire tech firms to re-prioritize in terms of both the products they want to focus on and the types of roles they want to cut down
According to a Nov-2023 survey by ResumeBuilder, 37% of business leaders have already begun to replace staff with AI, and 44% of the executive respondents stated they "anticipate further jobs cuts in 2024 due to AI efficiency"
👉 Ape of Omaha’s Takeaway:
On a macro level, generative AI may raise labor productivity and GDP (Investment bank Goldman Sachs believes that AI could eventually increase annual global GDP by 7%)
But the serious downside that no one seems to have figured out how to navigate is -- up to one out of four of current work could be exposed to AI and automation at large, which is the work and career of 300 million+ people
While we have a seeming strong labor market and economy at the moment (unemployment rate down to 3.7% from 14.7% 3.5 years ago), the white collar economy is telling a different tale
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💡 Something I’m thinking about
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