The technology sector is experiencing a significant year in 2024. Nvidia has surpassed earnings expectations, and the artificial intelligence boom continues to thrive. The tech-heavy Nasdaq index has seen a year-to-date increase of more than 8 percent.
Simultaneously, the U.S. economy is showing surprising strength, with the addition of 353,000 jobs in January, well-exceeding economists’ predictions. The inflation data, which is higher than expected, might deter the Federal Reserve from cutting rates as promptly as the market anticipates. This suggests that the economy remains robust enough to sustain tighter monetary policies for an extended period.
However, the situation looks different for tech workers.
“The layoffs at the beginning of 2024 indicate a significant transformation in the tech industry,” remarked Jeff Shulman, a professor at the University of Washington’s Foster School of Business. “We anticipate further layoffs as the landscape of work and technology evolves, and as investors’ preferences between risk and growth versus profitability undergo significant changes.”
In 2024, the number of layoffs in the tech sector has outpaced those in 2023. According to Layoffs. FYI, which monitors tech industry layoffs, approximately 42,324 tech employees have been laid off so far in 2024. This averages more than 780 layoffs per day this year. In contrast, in 2023, nearly 263,000 tech employees were laid off, averaging about 720 layoffs per day.
Several factors contribute to this churn. Artificial intelligence takes the lead. Companies are reallocating funds to invest in the chips and servers that drive the AI models behind these emerging technologies. Additionally, there’s the impact of the stock market. Companies implementing layoffs haven’t faced repercussions from investors or on their financial standings. On the contrary, they’ve seen their stock prices rise.
