Nearly 60,000 jobs have been cut since the beginning of 2024 at 245 tech companies, according to the tracking website Layoffs.fyi. How can you tell if your company will be the next to downsize? Should start job searching or work harder to prove your value?
"Right now, you want to be cautious. But you also have a good shot at keeping your job. So stay in it,” advises Allison Hemming, CEO of The Hired Guns, a recruiting company, adding that it's important to stay focused on making an impact at the office.
Are Widespread Job Layoffs Coming in 2024?
Layoffs have already been widespread in the tech industry this year, with well-known companies such as Google and Microsoft reducing their workforces by the thousands. But it's important to note that these layoffs are an outlier in an otherwise strong employment picture: U.S. Bureau of Labor Statistics data shows that the unemployment rate was 3.8% as of March 2024, one of the lowest points in decades.
The BLS also reports that the labor market has remained healthy so far in 2024. Led by robust hiring in health care, government and construction, U.S. employers added 303,000 jobs in March. Plus, with demand high for workers specializing in artificial intelligence and machine learning, many tech companies are still hiring amidst layoffs.
With inflation and other economic risks remaining, there's no crystal ball to predict what's in store for 2024.
Tech Layoffs in 2024
In 2023, 226,000 workers were let go by tech companies amidst mass job cuts, according to layoffs.fyi data. This marked a nearly 40% increase from the 165,000 layoffs in 2022.
Who Usually Gets Laid Off First and When?
Newer employees are at risk of getting laid off in the early round of downsizing, as the "last in, first out" saying goes. In some cases, recruiters and higher earners are let go as well.
Upper management may also adjust the business plan, and layoffs will then reflect the company's new priorities. There may be a greater focus on projects that generate revenue rather than nonessential projects. Those with redundant, outdated or surplus skill sets might be more likely to be laid off.
Layoffs can occur at any time, but as far as when tech layoffs most often occur, January and December are well-known for job losses as employers are reviewing their budgets during that time of year.
Here are some ways to find out if your company is preparing for layoffs.
1. Employees Who Leave Don’t Get Replaced
Involuntary attrition means a company may decide to eliminate the position altogether after an employee leaves. This leads to a smaller, streamlined workforce. With more tech companies investing in artificial intelligence integration and task automation, some may permanently axe certain positions to invest more money in AI-related roles.
2. Hiring and Spending Freezes
Hiring and spending freezes help companies save money and reduce costs. For example, as the economy suffered in early 2022 due to rising inflation and interest rates, many tech companies froze spending and hiring to stay afloat, which eventually led to industrywide layoffs later that year.
3. New Projects Get Put Off for Later
This may mean budgets are shrinking for projects that aren’t needed or that do not directly translate into revenue. While the delay of new projects alone doesn't definitively indicate imminent layoffs, it can be a red flag.