Remember the layoff wave of early 2023? Bad news: economic storm clouds are gathering, and whispers of 2024 cuts are getting louder. Don’t get caught unaware, watch what the data reveals.
According to layoffs.fyi, 144 tech companies have already laid off 35460 workers, not including other sectors. Layoffs usually takes pace during January as companies look to cut costs, restructure, reorganize and plan for the coming year. Unfortunately for the tech industry this numbers have been turbulent for two years in a row now.
Hard Truths about layoffs:
Hard Truth #1: “Good Performance” may not save you. In mass layoffs, it’s often about slashing headcount fast, not a personal reflection on your work. This is unfair, but helps you not spiral into self-blame.
Hard Truth #2: Layoff seasons have shifted, and waiting till Q1 numbers come out to act might already be too late. Job security now demands year-round vigilance to economic signals. These hints could be gathered from financial reports, leadership statements, reduced hiring, internal notices and much more.
Hard Truth #3: Layoffs aren’t always spread evenly, thinking ‘any job is better than no job’ is dangerous. Certain sectors traditionally act as the economy’s shock absorbers, shedding workers quickly. For example, a projected recession with rising interest rates has a highest risk of job losses in sectors like Information services, Finance, Transportation, etc. Discussed in detail on this topic below.
Industries cutting workers in 2024:
Financial Sector: Financial companies announced the most job cuts in January reaching 23,238. Since, September 2018, this is the first time the numbers have crossed the 20,000 mark in the financial sector.
Technology Sector: Surprisingly, technology sector comes in second in the list, unlike last year. Up until February 2024, 34,560 employees have been laid off compared to last years 25,000.
Retail Sector: Retail stores announced 5,633 job cuts last month. A drastic increase from Decembers 110 cuts. The reason for a low cut during December could also be linked with labor requirement during festive season and just a month after that massive layoffs.
Reason for job cuts:
Three of the most cited reasons for job cuts used by companies were firstly “Restructuring” accounting for more than 29,000 jobs, “Artificial Intelligence” standing second in the line and was cited 400 times in January job cut. Challenger has recently tracked around 4,700 job cuts announced due to AI, either because AI directly replaced the jobs and roles or the companies were pivoting on developing and implementing AI on regular basis.
Factors likely to drive 2024 Cuts:
- Interest rate mess – If the fed unsuccessfully carries out things starting in June, borrowing could become expensive, expansion plans halts, and jobs become the absolute casualty.
- Power Play – New CEO’s takes the helm, first decision to make their mark, instant impact on first quarter results is to slash jobs, regardless if its improves anything. Marissa Mayer at Yahoo, Ron Johnson at JCPenny are some examples.
- Automation opportunity – Not a regular case, but happens when individual upskilling stops or lacks. Owners consider software to be cheaper than workforce. No healthcare, no dental ,no leave, etc.
Again, this isn’t denying the fact that some companies in order to survive must take these steps to be able to at least save half the ship from sinking. Sometimes layoffs happen due to a startup’s bad idea or management structure. Some layoffs are due to blindside events and even the most prepares suffers, for example during Covid-19. Many small to medium sized businesses have to resort towards such steps to survive. Legitimate cases where companies like twitter for instance, had loads and loads of debt and had to get rid of employees to save the remaining boats are prevalent and needs to be strategically analyzed to consider its reasoning behind layoffs.
Preparing for the layoff storm:
- UpSkilling: Questioning yourself on are your skills up-to-date for your field’s shifting needs? This makes you either more secure now, or marketable if something bad happens. There are literally unlimited sources for upskilling, it’s just a matter of finding the right one and sticking to finishing it.
- Network Boost: Beyond reconnecting, think strategically. Are there local meetups, niche LinkedIn groups, etc., catering to your specialty? Being visible now pays off later.
- Financial Buffer: Tie this to layoff data. If your industry averages 6 months to find new work, having 6+ months’ expenses saved isn’t paranoia, it’s prudent!
Layoff Tracker 2024 (Last Update – February)
- Feb 17th – Nike is cutting 2% or 1700 employees worldwide
- Feb 15th – Cisco Announces 5% lay offs in its global workforce of 4000 employees.
- Feb 14th – Paramount global to lay off 800 employees after announcing record breaking Super Bowl ratings.
- Feb 13th – Instacart announces 250 layoffs
- Feb 10th – UPS to lay off 12000 managers as AI replaces work
- Feb 7th – Bell Media lays off 4800 jobs
- Feb 5th – Snap announces 500 job cuts
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