As the tech industry rings in the new year, it’s also ushering in a series of job cuts, all while pouring billions into artificial intelligence (AI) investments. The question on everyone’s mind is: What’s really happening here? While concerns about AI displacing human workers have been circulating for some time, not all of the recent layoffs can be attributed directly to AI’s impact on the workforce. Nevertheless, many tech companies are using AI as a pivotal reason to reassess their staffing numbers.
In the first fortnight of 2024, over 5,500 tech employees have found themselves without a job, according to data meticulously compiled by Layoffs.fyi. These job cuts have rippled across various roles, affecting both tech giants like Google and Amazon and smaller, up-and-coming startups.
Consider Google and Amazon, for instance, which just unveiled substantial layoff plans this week, impacting hundreds of employees across different divisions. It’s worth noting that these layoffs come on the heels of both companies disclosing their multi-billion-dollar investments in AI startup Anthropic. Discord, a beloved social platform, is also downsizing its workforce by 17%. Unity Software, renowned for its technology used in mobile games like Pokémon Go, is letting go of 25% of its workforce, while Duolingo has parted ways with approximately 10% of its contract workers.
These layoffs come after a challenging two-year period for the tech industry, marked by hundreds of thousands of job losses due to shifts in demand triggered by the pandemic. In 2023 alone, Layoffs.fyi recorded 262,682 layoffs within the tech sector, following 164,969 cuts in the previous year.
Roger Lee, the founder of Layoffs.fyi, points out that many tech companies are still grappling with the aftermath of their “overhiring during the pandemic surge.” The pandemic led to an unprecedented demand for digital services, prompting the tech industry to embark on a massive hiring spree. However, as pandemic restrictions gradually eased and macroeconomic uncertainties persisted, the industry found itself facing the most significant workforce reduction since the dotcom bubble burst of 2000.
AI is undeniably playing a role in some of these layoffs, with companies such as Chegg, IBM, Dropbox, Duolingo, and even Google explicitly citing it as a factor behind their staffing adjustments. Experts suggest that AI could indeed impact millions of jobs worldwide, though it may also usher in new job opportunities in the future.
Against the backdrop of ongoing layoffs, labor advocates and lawmakers have taken notice. It is a fact that concerns have risen regarding the disproportionate impact of these job cuts on specific demographics, such as minorities and women. A coalition of over two dozen Black lawmakers has expressed genuine concerns about the consequences of widespread tech industry layoffs and their documented disproportionate effects on the African American community and women. They have officially urged the Department of Labor to undertake close monitoring of these mass layoffs and implement measures to protect the workers who are most vulnerable to job loss.
The simultaneous occurrence of job cuts and extensive AI investments within the tech industry underscores the intricate challenges faced by the workforce as it navigates the evolving landscape of technology and automation.
