Tech Layoffs are Becoming the New Normal
Tech industry layoffs are surging in 2024, defying expectations amid substantial cash reserves accumulated by many firms. While last year’s job cuts were attributed to economic pressures from inflation and a hiring surge during the pandemic, this year’s layoffs are raising questions, especially as companies remain profitable.
According to Layoffs.fyi, 209 tech companies have laid off 50,312 employees since the beginning of the year. This follows a trend from last year, where 1,191 tech firms let go of 269,180 workers. Notably, these layoffs are not limited to startups but also include major players like Alphabet, Amazon, Meta, and Microsoft.
The extent of these job cuts is reminiscent of the dot-com bust in 2001, with Challenger, Gray & Christmas reporting a significant increase in layoffs compared to previous years. While there’s a slight decrease in cuts from the same period last year, the overall trend remains alarming for tech workers.
The job market in tech is becoming increasingly competitive, with many workers either leaving the industry entirely or accepting roles with less stability and lower compensation. Even as job seekers face challenges, salary increases in the tech sector have stagnated in recent years.
Despite the layoffs, tech salaries remain relatively high. Entry-level positions in fields like artificial intelligence can command salaries ranging from $109,500 to $138,500, while senior directors can earn between $178,500 to $310,050.
The rationale behind these layoffs appears to be driven by stock prices rather than economic necessity. Companies are leveraging layoffs to bolster their shares, contributing to what some experts are calling the “new normal” in the industry. As long as this trend continues to be embraced by workers and investors alike, it’s likely to persist in the foreseeable future.
