The tech sector has undergone a seismic workforce shift in 2024, with over 130,000 job cuts across 457 companies. Major players like Google, Amazon, Microsoft, and Tesla, alongside dozens of startups, are trimming their workforces in response to changing market dynamics.

These layoffs mark a continuation of the trend from 2022 and 2023, driven by cost-cutting, increased automation, and a focus on AI-led innovation.

Companies like Microsoft have laid off over 5,600 employees in gaming and cloud divisions this year, while Amazon’s workforce reductions impacted multiple units, including healthcare and media. Smaller firms are also feeling the crunch, with startups like CapWay and Exosonic shutting down entirely.

This mix of large-scale and targeted layoffs underscores an industry-wide realignment as companies navigate a challenging economic environment.

Why It Matters: These layoffs reflect a convergence of challenges in the tech industry, including overexpansion during the pandemic, declining revenue, and the rapid adoption of AI. As major companies reshape their priorities, smaller firms struggle to survive, highlighting the vulnerabilities of the tech ecosystem. The data offers critical insights into how innovation and workforce strategies are being recalibrated across the board.

• Major Workforce Reductions by Tech Giants:
  • Microsoft: Laid off 5,600 employees, including 1,900 in its gaming division post-Activision acquisition, and thousands in cloud operations.
  • Amazon: Reduced its workforce across units like Amazon Pharmacy and MGM Studios, with thousands impacted globally.
  • Meta: Continued restructuring led to additional cuts, affecting undisclosed numbers in 2024, following the 21,000 layoffs of 2023.
  • Tesla: Cut over 14,000 workers, more than 10% of its global workforce, citing market pressures in the EV sector.

• Startups and Smaller Companies Hit Hard:
  • 23andMe: Cut 40% of its workforce (over 200 employees) as it grapples with financial losses and diminished consumer interest.
  • Chegg: Reduced its headcount by 21%, citing competition from AI platforms like ChatGPT.

• AI and Automation’s Role:
  • IBM: Announced plans to replace up to 8,000 jobs with AI, part of a long-term shift toward automated solutions.
  • Grammarly: Laid off 230 employees, shifting focus to AI-powered tools designed for workplace efficiency.

• Monthly Trends:
  • January 2024 saw the largest single-month layoffs at 34,107.
  • August 2024: Marked another surge, with 26,024 employees laid off across multiple companies, reflecting mid-year recalibrations.

Go Deeper -> A comprehensive list of 2024 tech layoffs – TechCrunch