Firms in the tech sector globally are increasingly implementing workforce reductions in order to allocate more resources towards their artificial intelligence (AI) initiatives. According to Layoffs.fyi, more than 165,000 people were laid off in 2022, 264,000 in 2023, and over 132,900 employees have been laid off by 410 tech companies in 2024 so far.
Many tech firms have attributed these layoffs to the integration of AI and machine learning into their operations. Companies like Cisco, Dell, Meta, Amazon, and Intuit have all announced layoffs as they redirect resources towards AI projects. IBM and Reliance Industries have also mentioned the shift towards AI as a reason for reducing their workforce.
While some tech companies, like Alphabet, Microsoft, Salesforce, and Sonos, have not explicitly linked their layoffs to AI, there are still indications that AI is a driving force behind these decisions. Google CEO Sundar Pichai’s memo announcing layoffs came after investments in generative AI firm Anthropic and the launch of the Gemini AI model.
Other reasons contributing to the wave of layoffs in the tech sector include over-hiring during the Covid-19 pandemic, rising interest rates, economic slowdowns, inflation, declining stock prices, slowing sales, and concerns about a potential recession. Moving forward, experts predict that AI will continue to play a significant role in reshaping the job landscape and creating new opportunities for employees.