Technology Layoffs Continue in 2024 Amid Global Rise in AI
In the wake of the COVID-19 pandemic, a remarkable shift occurred in the technology sector, marked by an unprecedented hiring surge. Low interest rates and demand for tech products and services from consumers drove countless tech companies to hire in their thousands. However, as the world stabilised, this bubble began to burst, leading to a wave of layoffs across the tech industry.
2023 was one of the worst years on record for layoffs in the technology industry as many of these organisations rowed back on their hiring initiatives, with estimates that more than 200,000 roles were eliminated in the sector. This year has been no different, with a number of technology companies including Google and Amazon announcing layoffs amid a global increase in AI adoption.
Tech firms let go more than 7,500 employees in January 2024, according to tracking website Layoffs.fyi. Google said it was laying off hundreds of employees across multiple teams, while Amazon laid off several hundred employees in its streaming and studio operations.
Technology layoffs: A renewed focus on embracing AI
But while a number of companies reduced teams in their thousands in 2023 – with Meta CEO Mark Zuckerberg calling for a ‘year of efficiency’ for the company – big tech companies today are pointing to AI as the reasons for their restructuring.
In 2023 a number of technology companies revealed they would be focusing on AI going forward, and with an IBM report finding that about 42% of enterprise-scale organisations are actively using AI in their businesses, that AI adoption is set to increase further.
“No company wants to get left behind by the AI revolution and they are all making sure they have these capabilities and are prioritising them, even when it is at the expense of other initiatives,” D.A. Davidson & Co analyst Gil Luria told the Reuters news agency.
Google and Amazon are aggressively investing in their AI efforts to compete with Microsoft. In December Google unveiled its long-awaited Gemini model, while Amazon is reportedly developing a model to compete with ChatGPT-maker OpenAI's GPT-4, having announced its Amazon Q tool in November.
Tech layoffs and the skills crisis: Workforce training is needed
According to research by digital infrastructure company Equinix, 62% of IT decision-makers globally view a shortage of personnel with IT skills as one of the main threats to their business, with the skills shortage has been exacerbated by the speed at which the tech industry is transforming.
And as organisations look to harness the capabilities of AI, making the most of these technologies is the biggest areas of focus for IT leaders.
“With AI accelerating disruption at an unprecedented pace, the need for workforce training has never been more obvious and consequential,” said Orla Daly, Chief Information Officer at Skillsoft. “Organisations are at a critical point where they need to be deliberate and proactive about building skills and capabilities – especially related to AI – or risk falling behind in the coming year. Interactive training experiences where professionals learn by doing will unlock rich possibilities, creating business value while increasing team member engagement and morale.”
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