(IntegrityTimes.com) – The website layoffs.fyi tracks layoffs in the tech industry. According to their recent data, there have been more than 42,324 tech employees laid off in 2024 so far. These numbers average to about 780 layoffs per day this year, while in 2023 the average was closer to 720 layoffs per day over the course of the year. Many experts in the field have been arguing over what could be causing this worrying trend.
For some it is clear that a major cause is the rise of AI technology which companies are finding may reduce their staffing requirements. However, AIs are still a developing innovation and companies are still working to find the best ways to utilize them. Recent events with AIs that have been made public have shown that many models have significant flaws that could render them more of a hindrance than a help. Also, the companies who wish to work with AIs may lay off many employees to free up capital to invest in the equipment required to run them.
ZipRecruiter’s chief economist, Julia Pollak, suggests that the Federal Reserve raising interest rates to a two-decade high during the past two years may also be a significant factor. She says that tech companies are generally considered a risky endeavor, and investors may prefer to put their money in safer options rather than in experimental technology that may or may not pay off in the long run. She points out that most tech companies make most of their income outside the U.S., but the higher interest rates make it more difficult for American companies to break into those markets.
Wedbush Securities analyst Dan Ives believes the layoffs may be tapering off, as companies pivot to hiring more staff to work with the new AI tech. However, several companies have recently announced there will be more layoffs. Cisco has announced plans to lay off about 4,250 people, while Microsoft says they are planning to lay off 1,900 workers in their gaming unit this year. eBay has indicated they will be cutting approximately 1,000 people, and PayPal will be reducing their staff by about 2,500. Whatever the reason, it doesn’t look like the end is in sight yet.
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