Big cut. Tens of thousands of people have lost their jobs in IT this year

The beginning of 2024 was full of information about layoffs in subsequent companies related to the IT industry. This year’s job cuts are not as drastic as those from the beginning of 2023 – According to the Layoffs.fyi website cited by the newspaper, 34,000 people have lost their jobs in IT since the beginning of January. people.

The IT industry is laying off employees. Getting ready for artificial intelligence

Both small and large players are being laid off, although in the case of the latter, the topic is more media-related because there are many more laid off. In January, several hundred or several thousand positions were closed, among others: Microsoft, Snap, eBay and PayPal, and in total there are 138 companies laying off employees this year. Reasons? These are seemingly easy to guess. One of the key ones is artificial intelligence.

However, the point is not that AI successfully performs the work of the above-mentioned 34,000. people, therefore their positions were deleted. It’s more that IT companies are trying to adapt to changes by investing in new areas, primarily in generative AI. They slow down (cut costs) in one place to invest more in another. By taking such actions, they also show investors that they continue to focus on cost discipline, explains the daily, citing analysts’ opinions.

In their opinion, companies have come to the conclusion that improving efficiency is an extremely valuable issue, and that reducing the size of the company in practice allows them to do more. Moreover, according to analysts, this approach is contagious, so the coming months will not reverse the trend. There will probably be more layoffs in the technology industry and perhaps they will be on a larger scale.

This, in turn, causes anxiety among employees. – Anyone working in tech or gaming today is concerned about layoffs to some extent, either for themselves or someone they know. You see one company announcing layoffs and you think, “Here we go, who’s going to be there next week?” – says Autumn Mitchell, quality tester at ZeniMax, a Microsoft-dependent video game company, in an interview with “FT”.

Experts also point out that the beginning of the year is usually a period of disproportionately high layoffs. This year’s job cuts seem more “strategic” than “seasonal,” says Daniel Keum of Columbia Business School. In his opinion, 2022 and 2023 were “adjusting the size of the workforce” to the needs after the pandemic. This year, however, layoffs are accompanied by “active hiring”.

Throughout 2023 – according to calculations by Layoffs.fyi – 263,000 people lost their jobs in IT companies. people. By far the largest layoffs occurred in the first quarter.