Tech Layoffs in 2024

The tech industry continues to face significant challenges in 2024, with numerous companies announcing layoffs across various sectors. From gaming and alternative protein to cloud computing, the impact of these job cuts is felt broadly across the US tech landscape.

• This week saw at least 939 US tech sector employees laid off or scheduled for layoffs, according to Crunchbase News.
• Since the beginning of the year, over 86,447 workers at US-based tech companies have lost their jobs.

Microsoft Gaming Division Layoffs

Microsoft's gaming division announced layoffs affecting approximately 650 workers globally, primarily impacting corporate and support roles. While no games, devices, or studios are being closed, the layoffs highlight the ongoing industry adjustments and economic pressures.

Motif Foodworks Closure

The alternative protein sector saw another casualty with the closure of Motif Foodworks in Boston. This shutdown, attributed to various factors, including a legal dispute with Impossible Foods, underscores the challenges faced by companies in this emerging market.

Nori's Closure

Nori, a Seattle-based CO₂ removal marketplace focused on farmers, also announced its closure. The company attributed the decision to challenges in the Voluntary Carbon Market and a difficult funding environment, highlighting the uncertainties in this sector.

Edgio's Bankruptcy

Edgio, a Tempe, Arizona-based cloud-computing provider, filed for Chapter 11 bankruptcy protection. The closure affects an unspecified number of workers and marks another setback for the cloud computing sector amidst the current economic climate.

Crunchbase's Tech Layoffs Tracker

Crunchbase News provides a comprehensive Tech Layoffs Tracker to help track these developments in the tech industry. The tracker includes information on layoffs conducted by US-based companies or those with a strong US presence and is updated at least weekly.

• The tracker captures both startups and publicly traded tech-heavy companies.
• It also includes companies based elsewhere that have a significant team in the United States.
• The data is sourced from media reports, Crunchbase News reporting, social media posts, and layoffs.fyi, a crowdsourced database of tech layoffs.

Understanding Tech Layoffs

Tech layoffs are generally permanent terminations of employment, often driven by cost-saving measures or a mismatch between workforce size and current business needs.

• Companies may cite declining revenue, slowing sales, fears of a recession, or a need to optimize their workforce as reasons for layoffs.
• Many tech giants, such as Amazon, Alphabet, Microsoft, and Meta, have conducted substantial layoffs in recent years.
• While these layoffs are concerning, they often represent only a small percentage of the new hires made during the pandemic.
• Venture-backed startups may also face layoffs due to a slowdown in venture capital funding and falling startup valuations.

Factors Contributing to Tech Layoffs

Several factors contribute to the prevalence of tech layoffs, including:

• Economic Conditions: A weakening economy can lead to reduced consumer spending and a slowdown in business growth, leading to layoffs as companies seek to cut costs.
• Overhiring during the Pandemic: Many tech companies expanded their workforces rapidly during the pandemic to meet increased demand. As growth slows, these companies may need to downsize.
• Technological Shifts: Rapid technological advancements and shifts in consumer preferences can create disruptions in certain industries, leading to layoffs as companies adapt to new market realities.
• Competition: The tech industry is highly competitive, and companies are constantly vying for market share. Layoffs can be a way to reduce costs and stay ahead of the competition.

Impact of Tech Layoffs

Tech layoffs can have a significant impact on individuals, companies, and the broader economy. These include:

• Job Losses: The most immediate impact is the loss of jobs for affected workers, leading to financial hardship and potential challenges in finding new employment.
• Reduced Innovation: Layoffs can stifle innovation as companies cut back on research and development activities to save costs.
• Economic Slowdown: Mass layoffs can contribute to an economic slowdown as consumer spending and business investment decrease.
• Talent Drain: Layoffs can lead to a loss of skilled talent as experienced employees are forced to seek new opportunities, potentially weakening the tech sector's overall capabilities.

Future Outlook

The tech industry's future trajectory remains uncertain, with potential for continued layoffs and a shift in the hiring landscape. Several factors could influence the industry's course, including:

• Economic Recovery: A robust economic recovery could lead to increased hiring and investment in the tech sector.
• Innovation and Growth: The emergence of new technologies and growth in emerging markets could create new opportunities for tech companies and job growth.
• Government Policies: Government policies related to technology, investment, and regulation could have a significant impact on the industry's future.

Conclusion

The tech industry is experiencing a period of adjustment and restructuring, with layoffs affecting various sectors and companies. While the future remains uncertain, a focus on innovation, adaptation, and a supportive environment can help navigate these challenges and foster a resilient tech ecosystem.