The wave of tech layoffs is still sweeping across the United States in 2024

Who would have thought that the United States, whose economic situation looked good, would start a wave of tech layoffs at the beginning of 2024?

Throughout 2023, after the Federal Reserve continued to raise interest rates significantly, the U.S. inflation rate has declined, the economy has also shown a certain recovery trend, the unemployment rate has remained the same as in previous years, and consumer spending has been healthy. According to the U.S. Census Bureau, U.S. wages and salaries grew 4.6% in the 12 months ending in September 2023.

However, at the beginning of the new year, many companies announced a round of major layoffs. Among them are Wall Street giants Citibank and BlackRock, as well as Silicon Valley technology giants Google and Intel, as well as traditional retail giants Amazon and Nike.

A recent survey conducted by Resume Builder found that 38% of U.S. companies said they may lay off employees in 2024, and 52% of companies surveyed said they would implement a hiring freeze this year.

Even if they are not laid off, the remaining migrant workers may not have an easy time, because 30% of the companies in the survey said they would reduce or cancel holiday bonuses in 2024.

The biggest restructuring in 20 years

At the beginning of 2024, American companies are either laying off employees or on the way to layoffs.

On January 9, BlackRock, the world’s largest asset management company, announced that it would lay off about 3% of its existing employees, or about 600 people.

On January 12, after announcing poor fourth-quarter results, Citibank, the third largest bank in the United States, announced that it would launch the largest restructuring operation in 20 years and lay off 20,000 people over the next two years, accounting for about 10 of its total employees. %.

US tech layoffs 2024

This number does not include some outsourced employees. Citigroup said that if the company does not hire outsourced employees in the future, the scale of 20,000 layoffs may be “slightly lower.”

Citi CEO Jane Fraser bluntly stated that the performance in the fourth quarter of 2023 “looks terrible” and “extremely disappointing.” Citi’s revenue fell 3% year-on-year to $17.44 billion, which was lower than analysts’ expectations of $18.74 billion. Dollar.

“We have gone a long way on the road to simplification, and 2024 will be a turning point.” Fan Jieen said.

Citigroup estimates that this wave of layoffs will save as much as $2.5 billion.

As early as 2023, many major Wall Street banks, led by Wells Fargo and Goldman Sachs, have set off a wave of layoffs to reduce costs. Last year, the banking industry in various countries generally had a difficult time. Data shows that the world’s 20 largest banks laid off at least 61,905 people in 2023. U.S. banks laid off half of their total staff because they were facing the pressure of the Federal Reserve to raise interest rates.

However, at that time, Citigroup chose to stay put because its performance was acceptable. But now, after turning from profit to loss in the fourth quarter of 2023, the banking giant can no longer withstand the cold winter on Wall Street.

Some Citi employees are using vacation or sick leave to look for their next job, people familiar with the matter said. “I know some senior vice presidents who are on leave and maybe they’ll never come back.”

Not only Citigroup but also American financial services provider Janney Montgomery Scott believes that in 2024, major American banks will be further prepared to reduce expenses.

Tech Layoffs: Google and Amazon are busy laying off employees

In Silicon Valley, tech giants are also busy downsizing.

On January 10, Google, the major manufacturer, bore the brunt and announced that it would lay off more than 1,000 employees across multiple software and hardware departments, including core engineering, Google Assistant, Pixel mobile phone, and other teams.

At the same time, Google also closed a 300-degree kindergarten dedicated to providing services to employees and laid off 73 employees, which is equivalent to cutting off an important welfare project.

This is Google’s largest layoff after laying off 12,000 people at the beginning of 2023. Some Google employees even regard January as the annual large-scale “layoff month.”

US tech layoffs 2024

On the same day, Amazon issued a notice to employees stating that it would lay off hundreds of people in departments such as Prime Video and MGM Studios. In addition, the company’s Twitch also announced that it would lay off 500 people, accounting for about 35% of its total employees.

Amazon’s layoffs began in 2022 and have continued for multiple rounds. As of the end of 2023, the number of layoffs has reached more than 27,000, involving multiple areas of the company. It looks like Amazon’s layoffs will continue this year.

Bloomberg Intelligence analyst Poonam Goyal said Amazon’s layoffs may be to further streamline costs and improve efficiency to increase earnings.

Chip manufacturer Intel is not idle either. The company has already conducted five rounds of layoffs in 2023 and even warned that there will be further layoffs this year.

Tech giants are cutting jobs, and other companies are not immune.

Video game software provider Unity Software plans to cut 25% of its workforce, or about 1,800 jobs, in the largest layoff in the company’s history.

Discord, a game chat tool developer, announced that it will lay off 17% of its employees, totaling 170 people. This company laid off 4% of its employees in August last year. Its CEO believed that the number of employees in the company had grown too fast in the past few years.

Meta’s Instagram team laid off 60 technical project managers; Pixar is reported to have laid off 20% of its employees, about 300 people; even the newly established startup Humane has laid off 10 people.

In the retail industry, clothing rental company Rent the Runway has submitted documents to the U.S. Securities and Exchange Commission (SEC), announcing that it will lay off 10% of its employees and is expected to complete its restructuring by the end of the second quarter of this year.

Sportswear giant Nike announced in its quarterly earnings report that it will cut $2 billion in costs over the next three years, including layoffs, due to a weak revenue outlook in the second half of 2024. However, Nike has not yet specified how many employees it will lay off.

Is it the fault of AI or the economy?

Regarding this wave of large-scale layoffs, nearly half of the companies surveyed said that the expectation of a U.S. economic recession was one of the reasons.

Nicholas Bloom, an economics professor at Stanford University, said that many companies that have laid off employees lack confidence in the future of the U.S. economy and are worried about inflation and the tightening of the job market. He calls this assumption based on an impending economic recession “vibecession.”

“Such concerns will leave major companies scrambling to cut costs and increase profits in response to a possible sharp economic downturn, even though current U.S. economic data looks good,” Bloom said.

In addition, 40% of companies stated that they are laying off workers because they can replace workers with artificial intelligence (AI)

US tech layoffs 2024

The emergence of ChatGPT in 2023 has sparked a wave of AI generation in the technology industry.

The rapid advancement of AI in coding capabilities has significantly reduced the demand for junior programmers from more and more technology companies.

According to Bloomberg, some workers in creative jobs are particularly anxious because these jobs are more likely to be affected by the spread of generative artificial intelligence. Some language learning application development teams have also significantly reduced manpower because of AI.

Coupled with the downturn in the economic cycle, layoffs will naturally occur.

Matt Welsh, a former professor of computer science at Harvard University, said frankly that AI can now perform many software engineering tasks. As a result, the job security and salary levels of programmers in the entire industry will decline.

Bloomberg believes that whether it is Wall Street or Silicon Valley, it is difficult to return to the rapid growth state of the past decade. More and more companies have repositioned themselves and focus on profits rather than revenue growth.

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