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Tech Layoffs Predictions 2024: Market Analysis and Future Trends

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2023-11-14

As we stand on the cusp of 2024, the technology job market is undergoing a seismic shift fueled by advancements in artificial intelligence (AI), data analytics, and cybersecurity.

Every week, it feels like companies — from tech giants to SMEs — are laying off workers, with the second week of November bringing in a new wave of tech layoffs.

Amazon, Google, Zillow, and Snap are the latest tech names to reduce staff in November.

Google is on its fourth round of cuts since September, with staff within Users & Products (a global customer support and feedback team) being told this week that their employment is ending.

Previous layoffs happened within the recruiting division, along with Google News and Voice services.

Amazon has cut more than 27,000 roles this year. This week, the e-commerce giant announced cutting back on its music division staff.

While the number of cuts announced on November 9 is unknown, it affects workers across Latin America, North America, and Europe.

Snap, a social media platform, this week announced it was cutting back on around 20 product manager roles, following a turbulent few months where upper management staff such as Nima Khajehnouri, vice president of engineering, moving on from the company.

Meanwhile, as part of an ‘audit’, the housing site Zillow this week laid off approximately ‘two dozen’ staff, according to SFChronicle.

A Grim Global Outlook For Tech Teams

In just one year, tech layoffs have surged past 240,000 globally — a staggering 50% increase from 2022. This rise comes as giants funnel billions into AI while cutting thousands of jobs simultaneously.

San Francisco is the home of many tech giants and is feeling the loss.

Abby Raisz, from the Bay Area Council Economic Institute, told Fox News: “The nine-county Bay Area lost almost 17,000 jobs last month, which was the worst monthly job loss we saw Omicron hit in late 2020 and early 2021.”

Last month, several companies announced cuts, with a mix of economic uncertainty, ‘strategic priorities’, or AI displacing jobs cited as the causes.

These include:

  • Nokia announced it would cut up to 14,000 jobs between now and 2026, blaming weaker-than-expected earnings, around 16% of its current headcount of 86,000 employees.
  • LinkedIn announced it would lay off 668 employees across finance, talent, and engineering areas — or more than 3% of staff globally. The company, part of Microsoft, said it was making ‘strategic priorities for our future.’ The cuts are the second major staff reduction in 2023, following the loss of around 700 jobs in May.
  • Q&A stalwart Stack Overflow also announced the end of the line for 100 employers — around 28% of staff — with the rise of AI said to be one of the root causes.
  • Google laid off 12,000 workers — around 6% of its staff — over 2023, including 50 employees at Google News in October.
  • Self-driving car technology company Waymo LLC is on to its third round of layoffs this year.

Unfortunately, as we prepare for 2024, these trends look set to continue. With other industry leaders from Cisco Systems to Roku joining the fray, the debate on how tech innovation impacts employment is further intensifying.

Elsewhere, Qualcomm’s decision to slash 1,200 workers — 2.5% of its workforce — and Epic Games’ move to lay off 16% are further indicators of a broader, unsettling trend.

Why Are There So Many Tech Layoffs?

Anna Tavis, clinical professor in human capital management at New York University, believes that all industries will continue to “right size” their staffing levels in pursuit of efficiency, cost cutting, and rationalizing their skills portfolio.

“In the aftermath of the recruitment surge post-pandemic, its lingering effects remain evident. Tech firms overspent on growing their staff sizes. Now, they experience a pressing need to recalibrate their ranks and align to the needed levels.”

As we stand on the threshold of a new era in the workforce, driven by rapid advancements in artificial intelligence, the conversation around AI’s impact on labor costs has reached a fever pitch. Business leaders and analysts are examining the balance between automation and human skills. Tavis offers a little food for thought for companies contemplating an AI-powered future.

“There is a heightened anticipation surrounding the potential labor cost efficiencies from adopting AI. While it is believed that AI might replace some jobs or parts of jobs currently performed by human workers, it is important to note that these expectations might be ahead of their time. Nevertheless, given AI advancements, companies are preparing for a major organizational shift.”

In the wake of sweeping layoffs at major corporations like Twitter, the dialogue surrounding corporate restructuring and its implications has gained new urgency. Such high-profile moves don’t merely impact the companies directly involved; they set the tone for industry-wide trends, creating ripple effects that influence organizational behavior across the board.

“At its core, the market continues to reward workforce reductions, no matter how compelling the evidence highlights their damaging effect on companies’ cultures. Industry sectors likely to see layoffs in 2024 include tech and tech-related firms and consulting services.”

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Vulnerable Roles in Tech

Nick Gausling, a seasoned business consultant and managing director of Romy Group LLC, sheds light on the intricacies of the tech world under these conditions.

“The tech sector relies heavily on stocks and borrowing. When interest rates rise, borrowing becomes more expensive, and stocks decline. Rates are at their highest level in over two decades and climbing, making more tech layoffs virtually inevitable.”

Gausling’s insights tap into the core of challenges facing established tech companies and fledgling startups, illuminating the factors that dictate their survival, scalability, and employee retention strategies in this high-stakes environment.

Many tech startups scramble to get any funding they can, even on unfavorable borrowing terms. Those who succeed might survive today but cannot service the debt tomorrow. If your company’s unit economics aren’t already profitable, it’s a precarious situation.

While companies rigorously evaluate roles indispensable to their core operations versus those considered more peripheral, Gausling also emphasizes the heightened vulnerability of specific roles in these uncertain times.

“Staff who directly contribute to building, selling, or servicing the company’s core product are least likely to be laid off in 2024, while those in middle management and support roles are most vulnerable. But in new or experimental divisions outside the company’s bread and butter, even engineers and salespeople need to watch out.”

 

Future-Proofing Your Career

On the flip side, Cliff Jurkiewicz, vice president of global strategy at Phenom, an HR technology company, believes a positive side exists. The good news is there’s a tremendous opportunity for tech jobs in other industries.

“The retail and communications industries are going through massive technology upgrades. AI is driving expansion in tech. Like disruptive technologies before it, AI is creating new roles and new skill requirements for existing roles.”

AI Curators work closely with expansive language data sets to train AI algorithms and ensure that their outputs align with the organization’s goals. AI Ethicists serve as ethical compasses, grappling with questions of fairness and transparency.

“Think of Jeff Goldblum’s character in Jurassic Park always pushing beyond “can something be done” and asking “but should it be done?”

AI Policy Makers and Legal Advisers scrutinize technical and societal impacts, working in tandem but distinct from AI Ethicists. AI Trainers educate the workforce and the AI itself, acting symbiotic with AI Curators.

AI Auditors are responsible for ensuring the accountability of AI systems, while AI/Tech Interpreters adopt a more strategic lens, translating the overarching impact of AI technologies within an organization.

These roles signal AI’s maturation in the enterprise and underscore the multifaceted responsibilities that come with its adoption.

“Tech professionals have an advantage. Their skill sets are highly marketable to the tremendous opportunities for tech roles in other industries. They also have the background and ability to simplify upskilling for the new AI-based roles. And these new AI roles are just the beginning, with others not far off on the horizon.”

Seeking some career advice? Check out:

The Six-Fold Rise of Data Jobs in the Tech Industry

Linda Lee, chief people and culture officer of Velocity Global, shared job trend data from the past five years, which shows that data-related jobs have increased six-fold in new employment from 2018 to 2022.

To get more specific about which data roles are leading the charge, almost a quarter of these jobs were data scientists and data engineers in 2022.

Lee believes this will likely continue to be a focus in 2024 as data reigns king in business.

“Because borders no longer restrict one’s options for work, we expect borderless hiring to continue its upward trajectory as companies look to boost revenue streams, broaden talent pools, and retain quality talent.”

As the tech industry solidifies its role as a global change agent and growth engine, understanding the job market trends for 2024 is becoming crucial for both seasoned professionals and newcomers eager to make their mark.

“The tech space catalyzes worldwide change, innovation, and growth. The job market has been challenging the past couple of years, but the industry’s potential drives those to stay in the space and new talent to enter. The industry will only grow in 2024, and according to the data, enhancing your data skills and highlighting your managerial experiences will help you break through and move up.”

Curiosity as Currency: Why the New Tech Industry Values an Agile Mindset

Martha Angle, VP of talent management and inclusion at OneStream Software believes that the evolving tech industry demands adaptability and innovation from employers and job seekers.

Traditionally, technical roles often revolved around tightly defined job functions, leading to limited exposure to diverse technologies and projects. This specialization frequently meant not everyone had access to the latest technologies or the opportunity to work on exciting and innovative projects.

As a result, employees could find themselves pigeonholed in their roles, lacking the chance to explore broader horizons within the tech landscape. This limitation not only hindered individual career growth but also constrained organizations from tapping into the full potential of their workforce.

“The current shift toward a more flexible and adaptable approach in the tech industry is breaking down these historical barriers. Employers recognize the value of offering diverse opportunities and encouraging employees to stretch beyond their comfort zones, fostering a more dynamic and innovative work environment.

 

This transformation benefits job seekers and organizations, allowing for a more agile response to the ever-evolving demands of the tech sector.”

Conversely, job seekers must exhibit proactive curiosity and a genuine enthusiasm for learning and experimenting with new technologies.

“Relying solely on an MIS degree to demonstrate technical proficiency is no longer sufficient.”

Employers seek evidence of candidates exploring tech stacks beyond Java and Python or taking on independent projects to delve into languages like C-sharp or experiment with generative AI tools. Those who break free from their silos gain a competitive advantage.

The Case for Automated Onboarding and Offboarding

Arthur Lozinski, CEO of Oomnitza, who helps companies automate their technology management processes, shared how he sees companies of all sizes across all sectors and geographies prioritize offboarding process automation to address efficiency, security, and cost considerations.

“It could indicate they understand the fluidity and unpredictability in today’s business environment and want to be prepared to offboard securely at scale if needed

 

Additionally, workforce adjustments are always made for holiday and seasonal work, shifts in demand or business strategy, and to address higher than anticipated voluntary turnover. So, no matter what, high rates of personnel change are the new reality.

 

What I can say is that since the start of the pandemic, one of our top use cases has been automating the processes that drive employee onboarding, offboarding, moves, and business reorganizations.”

Lozinski also shared research that revealed how inefficient and manual offboarding and onboarding processes can increase the cost and business risk of employee turnover.

We found that a third of enterprises lose more than 10% of their associated technology assets, and 42% experience unauthorized access to SaaS applications and cloud resources when offboarding workers.

And 50% lose at least 10% of their annual expenditures on underused, unmanaged, or unaccounted-for SaaS/cloud resources. Those hidden costs add up, effectively acting as a layoff tax. Who knew cost-cutting could be so expensive if not done appropriately?

The Bottom Line

As we confront the complexities and contradictions of the tech employment landscape heading into 2024, the onus is on us — whether as business leaders, job seekers, or industry observers — to adapt, innovate, and ethically navigate this evolving terrain.

While challenges loom large, from unexpected layoffs influenced by economic variables to the relentless drive for efficiency, the industry also holds untapped potential.

New roles are emerging at the nexus of technology and ethics, governance, and strategic integration, signaling not just the maturation but the humanization of AI and data science within the enterprise.

For business leaders, the mandate is clear: be proactive rather than reactive. You are not merely managing technology; you are shaping the future of work in a world increasingly mediated by it.

Whether investing in AI curation teams to guide machine learning efforts or focusing on the “layoff tax” that accompanies unthoughtful downsizing, strategic foresight combined with ethical considerations can turn challenges into opportunities.

For professionals, emphasizing specialized skills doesn’t just imply employability; it advocates for adaptability and lifelong learning. A path of continuous learning will allow you to evolve with the job market and its shifting requirements.

As we enter a year of unparalleled technological change, let’s not lose sight of the human element that powers innovation and shapes its impact. Beyond the data and algorithms, our collective choices will define the tech job market and society at large. In navigating this future, remember: it’s not just about smarter technology but a more inclusive world for everyone.