Not only startups but also big technology companies (Big Tech) are also actively cutting staff.
Working in the technology industry is no longer a reliable employment option as the trend of layoffs continues. According to Layoffs.fyi, since the beginning of 2024, 209 technology companies have laid off 50,312 employees. If we take statistics for 2023, a total of 1,191 companies laid off 269,180 employees.
The wave of layoffs at technology companies will not stop.
The wave of layoffs at technology companies will not stop.
This trend not only affects small startups but also large corporations such as Alphabet, Amazon, Cisco, eBay, Meta Platforms, Microsoft, SAP and Unity Software. Another example is PayPal, which announced earlier this year its intention to cut 2,500 employees, nearly 9% of the company's total workforce.
According to Challenger, Gray & Christmas, the scale of the problem in the IT sector is so great that the current cuts are second only to the dot-com bubble, which ended in 2001 with the market crash. stock due to the rise of unprofitable Internet startups and leading to huge losses for investors as well as the bankruptcy of a large number of companies. At the same time, statistics show that in the period from January to February 2024, the number of people laid off in the IT sector decreased by 55% compared to the same period last year, when 63,216 people lost their jobs. in 2 months.
It's worth noting that Challenger, Gray & Christmas's data doesn't exactly match Layoffs.fyi's calculations. The company calculates that between January and February 2024, 28,218 people were laid off in the IT sector and 12,412 people were laid off in February. However, the statistics are disappointing for IT professionals. , many of whom are accustomed to receiving increased attention from employers. A CNBC survey found that many professionals are facing increasing competition when looking for jobs in the IT sector.
AI is part of the reasons why businesses lay off employees.
AI is part of the reasons why businesses lay off employees.
Another piece of bad news for IT professionals is that wage growth in this segment has practically stopped. According to Layoffs.fyi, once-rapid wage growth in the tech sector has largely stagnated over the past two years. This does not mean that IT professionals are paid little. Data from Complete.io indicates that an AI expert can earn between $109,500 and $138,500 per year. At the same time, a person who manages a team of employees or is responsible for a business process earns between $178,500 and $310,050 per year.
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Last year, IT companies said the layoffs were necessary to optimize business operations and were due to high inflation, low consumer demand and the fact that during the Covid-19 pandemic there was an Active campaign to recruit experts. This year, inflation is significantly lower and many IT companies have available capital but continue to lay off employees, while many AI technologies help reduce recruitment demand. According to analysis, this policy is dictated by the desire to achieve better financial performance, therefore the layoffs will strengthen the company's shares.
