How Many Tech Companies Grappled with Job Cuts in Q1?

Here is a closer look at tech firms confronted with job cuts during Q1

Job Cuts in Q1, 2024: In the fast-paced and ever-evolving world of technology, the first quarter of 2024 brought a sobering reality for many industry giants. Despite the optimism that often accompanies the start of a new year, several tech companies found themselves grappling with the difficult decision of implementing job cuts. From industry behemoths like Meta and Apple to renowned players such as IBM and Amazon, a wave of layoffs swept through the tech sector, shedding light on the challenges and uncertainties facing the industry.

According to Giuseppe Gasparro, a partner and managing director of New York-based consulting company AlixPartners, the latest numbers reveal that layoff activity in the IT sector may be far from done following a large rise in early 2023 followed by a slowdown later that year.

According to data from the layoffs.fyi website, tech layoffs have increased significantly in the first few months of 2024, more than tripling from the fourth quarter of last year.

Layoffs.fyi reports that the tech industry has disclosed over 50,000 job losses since the beginning of the year. This is up from less than 24,000 in the last three months of 2023, according to quarterly statistics provided to CFO Dive by the site's developer, software entrepreneur Roger Lee.

As per the data, more than 200 tech companies have laid off employees this year, including IBM, Apple, Amazon, Meta, Microsoft, Salesforce, Zoom, and PayPal.

"What we're seeing is companies adapting to a new normal," Gasparro said in an interview, adding that he anticipates additional layoffs this year, though they may start to level out.

High lending rates, declining consumer demand, and over-hiring during the COVID-19 epidemic have prompted technology industry leaders to take a more organized, long-term strategy to ensure profitability, according to an AlixPartners analysis.

Tech businesses disclosed more than 167,000 job cutbacks in the first quarter of 2023, according to Lee's quarterly statistics, which were sent over email. The number fell to almost 46,000 in the second quarter of 2023, then to less than 26,000 in the third quarter.

The latest comeback demonstrates that IT behemoths are laser-focused on increasing productivity and profitability this year, despite investor pressure and uncertainty on many fronts, according to Gasparro.

"It's an election year, interest rates are still high, and the fear of a possible recession is not completely gone," he told reporters. On top of that, IT businesses are dealing with market disruptions caused by the rapid emergence of artificial intelligence, he added.

According to a recent survey by business and executive coaching company Challenger, Gray & Christmas, 166,945 layoffs were declared in the United States in January and February, a 7.6% decrease from the 180,713 job cutbacks revealed in the same period last year. According to the business, the technology sector had the most layoffs of any industry, at 28,218.

Since 2009, when 186,350 job layoffs were announced in the second month of the year, February's number of 84,638 is the highest.

Companies are no longer reducing their workforce number just due to over-hiring; they are now discovering the benefits of being leaner, according to Mark Zuckerberg, who spoke with Morning Brew Daily's podcast last month, as reported by Business Insider.

Meta has made a return after laying off tens of thousands of employees, with its shares now at an all-time high, according to the journal.

"It was obviously really tough; we parted with a lot of talented people we cared about," Zuckerberg stated in the interview, according to the newspaper. "But in some ways actually becoming leaner kind of makes the company more effective."