Tech companies boost investments, record rise in revenue despite massive layoffs

Whenever we hear about layoffs, our first thought is that the company must be under financial stress. However, that’s not always the case. Right now, layoffs at major tech companies aren’t a result of a financial crunch but have more to do with reassessment and realignment.

Microsoft, which recently shed 1900 jobs in the gaming division soon after the Activision Blizzard acquisition, is registering record ROI. Similarly, layoffs at Meta, Google, and Amazon, amongst other tech giants, led to thousands losing their income source while these companies continue to pump billions in technologies like Artificial Intelligence and Virtual Reality.

According to Layoffs.fyi, approximately 84,060 employees lost their jobs across 293 tech companies in 2024 alone.

So, what do the two terms, reassessment and realignment, mean in this context? The moment you understand this, it all starts to make sense!

Massive layoffs are a result of over-hiring and changing priorities

When the Covid-19 pandemic first hit, everyone was forced into their homes. We used websites and apps to make the simplest of purchases, be it groceries, clothes, or household appliances because going out was practically impossible.

Suddenly, there was a dearth of workers in the tech sector, people who could keep the systems going, streamline the user experience, and come up with new ideas. As a result, all major tech corporations went on a hiring spree.

According to a report in CNN, in the period between 2019 and 2022, Amazon recorded a 106% increase in workforce, Meta 103%, Alphabet 64%, Twitter 63%, Microsoft 53%, and Apple 20%.

Everyone knew this bubble would eventually burst. And that happened as we neared 2023!

News of layoffs across the tech landscape became common, with roughly 263,180 employees losing jobs across 1191 tech companies in 2023, according to Layoffs.fyi. The same trend followed into 2024.

This happened because companies reassessed the demand, identified roles that were no longer critical, and proceeded with the layoffs.

That’s one factor. Another is the changing priorities or companies realigning their strategies according to the market demand, as has always been the case, even during the period of pandemic.

Companies are now looking for people well-versed in Artificial Intelligence, because, even in its infancy, AI is delivering results. Companies that integrated generative AI have reported positive results, and others will follow suit. And that needs employees who can help organizations adapt to the change!

Besides, even if we ignore the financial aspect, Artificial Intelligence remains key to consumer-centric products. For instance, AI assistants like Copilot in Windows 11 and Google Gemini. So, that’s where most of the jobs are right now.

Nonetheless, it’s also a fact that AI is taking up jobs. Even Bill Gates has expressed reservations about this aspect of the latest technology. But there’s another side to it!

Adopting AI in the workplace is no longer optional. Ultimately, recruiters want people with AI skills. So, the sooner you move, the better your chances of landing a suitable job or keeping the current one.

What’s your take on layoffs across tech companies in 2024? Share with our readers in the comments section.