The tech industry continues to shed jobs in 2024, with tens of thousands of employees affected by layoffs. Even industry giants like Intel, Cisco, and Dell are forced to adapt to new economic realities and optimize costs amid shifts in demand and the rapid growth of artificial intelligence. IT-World has analyzed the situation.
2024 is shaping up to be a year of mass layoffs in the tech sector, with the scale of cuts being staggering. What once seemed like temporary difficulties has become a sustained trend, impacting both large players and startups alike.
Intel, one of the leaders in the global microprocessor market, announced in August this year that it would cut 15% of its workforce. This equates to approximately 15,000 jobs lost due to an 85% drop in net profit despite steady revenue of $12.8 billion in the second quarter. These layoffs were deemed necessary to reduce costs and adapt to new market conditions. Dell Technologies is also continuing to reduce its workforce: after laying off 13,000 people in 2023, the company cut another 6,650 jobs in February 2024. A total of 12,500 layoffs are planned, or about 10% of Dell’s global workforce. These measures are driven by the need to optimize expenses and adapt to declining demand for traditional PCs and infrastructure solutions.
Cisco Systems, a major telecommunications equipment manufacturer, laid off 4,200 employees in February 2024—5% of its total workforce. However, the layoffs didn’t stop there: in August, the company announced plans to lay off thousands more employees, despite significant investments in artificial intelligence and cybersecurity.
These events are just the tip of the iceberg in the global picture of mass layoffs.
In 2024, more than 60,000 employees across 254 companies worldwide lost their jobs. In 2023, this number was even more staggering—262,682 layoffs across 1,186 companies.
These cuts are related to the fact that during the pandemic, many companies significantly increased their workforce to cope with the surge in demand for digital services. However, with the end of the pandemic and a return to more normal business conditions, these excess resources have become a burden. Microsoft, after completing its $69 billion acquisition of Activision Blizzard, also couldn’t avoid layoffs. The company’s gaming division saw 1,900 employees laid off. SAP, the German corporate software giant, announced 8,000 job cuts as part of its shift towards generative AI technologies.
Smaller companies were not spared either. For instance, the Kenyan startup Mobius shut down operations due to financial difficulties, and Stack Overflow reduced its workforce by 28%, betting on generative AI to automate software development.
These layoffs are occurring against a backdrop of projected global IT spending growth, which is expected to reach $5.1 trillion in 2024. Nonetheless, even with such growth, companies are being forced to cut costs and rethink their business models to remain competitive in the new economic environment.