The tech industry is facing a paradoxical situation in 2024: while some segments are cutting jobs to cope with rising costs and shifting priorities, others are hiring aggressively to gain an edge in artificial intelligence (AI).
According to the website Layoffs.fyi, more than 24,500 tech workers have been laid off in January, the most in any month since March 2023. Some of the biggest names in tech, such as Alphabet, Meta, Microsoft, Amazon, eBay, and Salesforce, have announced job cuts across various divisions, citing the need to focus on their “biggest product priorities” and “key strategic growth areas”.
However, at the same time, these companies are also investing heavily in AI, which is seen as the next frontier of innovation and competition. Google CEO Sundar Pichai warned employees that there would be more layoffs this year as the company shifts resources to AI, while Microsoft has integrated ChatGPT into Bing search, prompting Google to beef up its own search engine with AI features. Meta, Amazon, and Salesforce are also hiring AI talent to enhance their platforms and services.
Industry experts say that the AI hiring frenzy will fuel more layoffs in other tech segments, as firms strive to balance costs and efficiency. Dan Ives, managing director at Wedbush Securities, told CNBC that “layoffs will continue to happen for Big Tech in some areas while the hiring frenzy in AI will be unprecedented as this arms race continues across the tech world”.
The tech layoffs come amid a bullish market sentiment, as the Nasdaq is at its highest since early 2022, and Alphabet, Meta, and Microsoft have all reached fresh all-time highs. However, the tech industry is also facing challenges such as rising interest rates, inflation, regulation, and competition, which could affect its profitability and growth prospects.
The tech layoffs also have implications for the job seekers, who may face difficulties finding suitable opportunities that match their skills and experience. Raj Mukherjee, executive vice president and general manager for Employer at Indeed, wrote in Forbes that “job seekers crave personalized opportunities that match their skills, while employers value a quick response from candidates who align with their needs”.
He suggested that AI could enhance the hiring process by automating mundane tasks and improving matching and personalization.