A recent CNBC report outlines how the tech sector is having a big 2024. It highlights how Nvidia just crushed earnings expectations. The AI boom remains in full swing. The tech-heavy Nasdaq index is up more than 8 percent year-to-date. However, the number of tech sector layoffs in 2024 has been outpacing the number of terminations in 2023. So far, about 42,324 tech employees were let go in 2024, according to Layoffs.fyi, which tracks layoffs in the tech industry. That averages out to more than 780 layoffs each day in 2024. In 2023, nearly 263,000 tech employees got laid off, averaging about 720 firings each day that year.
Understanding the Back Story:
According to Jeff Shulman, Professor at the University of Washington Foster School of Business, he explains, “If you rewind before the layoffs, all the tech companies were emphasizing growth. So capital was cheap, companies could get loans, and access to capital was affordable. Then you see as interest rates went up, you’ll start to see that that growth in headcount didn’t translate to growth and profitability, and access to capital became quite a bit tighter. You saw many companies start to hit the panic button. And so we saw these thousands of people get laid off all at once.” In addition, “the start of 2024 signals a dramatic shift in the tech industry, we’re going to continue to see layoffs happen as the future of work has changed, as the future of technology has changed. And as investor’s appetite for risk and growth versus profitability has dramatically changed as well.”
The AI Effect
Chris Hyams, CEO of Indeed, states that a recent report from Indeed shows that the number of job posts containing Gen AI terms has been surging. “There’s about a 500% increase in the number of jobs that mentioned generative AI, and there’s about a 6,000% increase in the demand for job seekers for these jobs. But there still is, I think, a mismatch the other way and the total amount of demand for AI talent far outstrips the number of AI professionals.”
There are different opinions on how AI is impacting tech layoffs. On one side, there’s the view of Shulman who believes that “AI is definitely playing a role in the layoffs that we’re seeing. Automation has increased efficiency for some of the workers who can utilize AI to make marketing decisions, analyze data, to serve customers more efficiently and effectively. So AI is a paradigm shift that is changing the way people work and changing the priorities of tech companies.”On the other side, there’s the view of Cory Stahle, Economist at Indeed, who believes that “right now, I don’t see that there a big impact from AI in these tech layoffs. Some businesses have maybe cited that they’re trying to shift priorities and they’re letting some employees go to focus more energy on some of these generative AI tools, but I think it’s important to say that that’s very different than saying that companies are laying off people now because general AI and all these tools are taking jobs.”
Is there a Success Story Here?
While tech and non-tech companies continue to announce layoffs in 2024, many point to the importance of having techniques and strategies to navigate the twists and turns of a career.
Grace Puma, the former COO of PepsiCo, and Christiana Smith Shi, the former President of Direct to Consumer at Nike, advocate in their book for the importance of playing the long game in one’s career. (Interview in Matt Alder’s Podcast: Recruiting Future)
They highlight the importance of taking the time to have a process thinking through what you’ve learned so far in your work career: What environments, what kind of work, what kind of passions, what kind of purpose motivate you and matter to you. Then write them down and go through a process of saying, what does that say about what you want to do in your career?
In the Podcast, Find Your Dream Job, Kristie Steele, Sr. HR Manager, shares the importance of listing your accomplishments, not just your responsibilities, in your resume. Followed by being able to share stories of your strengths. Finally, look for companies and hiring managers that value people who prioritize developing their strengths.
Success is not always a straight line. The highs and lows of the tech sector in 2024 reflect the typical journey of a tech professional. Recognizing that we can only control what is within our power, it’s important to understand that strategies such as recognizing personal strengths and adopting a long-term career outlook are crucial for navigating the changes one will face in their career.
-Ruben Garcia.
