The tech industry has been struggling with massive layoffs since early 2023, and the trend has only continued into 2024. A report indicates that the layoffs are driven by economic challenges, high interest rates, and rapid advancements in artificial intelligence (AI).
Key Players
The BestBrokers team analyzed over 800 layoff announcements from the tech sector by tracking updates on the IT job portal trueup.io. They found out that a total of 211,033 employees have been laid off across more than 194 tech companies worldwide since the start of 2024. Major players like Intel, Tesla, Li Auto, and SAP have made significant workforce reductions, citing cost-cutting measures and a shift towards AI technologies as key reasons.
Reasons for Layoffs
The report highlights three major reasons for the global layoff trend. Firstly, the overhiring during the COVID-19 pandemic. Companies rapidly expanded their workforces to meet the soaring demand for digital products and services. However, as the lockdown ended and demand waned, many firms found they had more employees than needed, leading to significant job cuts. Secondly, the rise in interest rates, making borrowing more expensive and forcing companies to cut costs, including workforce reductions. Thirdly, advancements in automation and AI technologies have made certain roles redundant, prompting companies to restructure their teams.
Impact on Companies
PC manufacturer Dell has cut a total of 18,500 jobs across two rounds of layoffs, accounting for 8.77% of all global tech layoffs this year. Despite the layoffs, Dell saw a 9% year-over-year revenue increase in the second fiscal quarter of 2025. Tesla cut approximately 10% of its workforce, explaining it as a necessity to eliminate role duplications. China's Li Auto also cut 10,000 employees, representing 77.52% of all job cuts by Chinese companies since the beginning of the year. SAP, Toshiba, and Cisco also made significant job cuts, along with other major tech companies like Getir, Paytm, and Telefonica.
Massive layoffs in the tech industry continue, driven by economic challenges, high interest rates, and rapid advancements in AI. Companies are forced to restructure and cut costs, leading to significant job losses worldwide.
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