No, The Great Tech Layoffs Of 2023 Arent Happening Again

For now, 2024 will start the same as 2023, namely a week full of layoffs at technology companies.

Duolingo cut 10% of its contractors earlier this week, citing artificial intelligence as the reason. Twitch announced 500 layoffs, and its parent company Amazon also laid off hundreds of workers at Prime Video and MGM Studios on Wednesday.

Google followed suit by laying off hundreds of employees working on Google Voice Assistant, and restructuring other impacted hardware teams in augmented reality, Pixel phones, Fitbit watches and Nest thermostats. On Thursday, Discord announced that it would lay off 17% of its workforce after hiring rapidly in recent years.

It's a wave of predictions that may sound familiar, but experts say the layoffs don't mean 2024 will be as wild as previous years. These numbers pale in comparison to layoffs in 2022 and late 2023 as companies like Google, Amazon and Meta cut thousands of jobs after years of rapid growth. And with a stable labor market, this does not mean a continued decline in tech jobs, but rather a shift in corporate priorities.

Rachel Cederberg, senior economist at employment analysis firm Lightcast, said the technology sector overall appears healthy as consumer habits stabilize after rapid changes during the Covid-19 pandemic. Some recent restrictions target specific categories and products and may only impact some business operations.

“Companies are constantly making decisions about what they should focus on, and this sometimes leads to job losses,” Cederberg said. Companies will likely continue to make these small, targeted cuts in the coming months, but he doesn't expect any “contamination” from layoffs at tech companies or other sectors.

These are not fundamental rights that tech companies will have in 2022 and 2023, said Daniel Keum, a management professor at Columbia Business School. As companies look for ways to leverage and monetize automation and creative AI, a “realignment” is taking place between work and priorities, Keum said. Over the past year, the number of job openings in the creative AI field has increased rapidly, even as the technology industry experienced significant job losses.

Google is making changes in the second half of 2023 to "be more efficient and work better" and realign product priorities, company spokesperson Courteney Mencini told Wired. “We invest responsibly in our company's highest priorities and important opportunities for the future. » Some of Duolingo's layoffs occurred because "changes in the way we create and share content no longer require contractor work," said company spokesman Sam Dulcimer, while other layoffs resulted in the end of the project.

Layoffs.fyi, which tracks job losses in the tech industry, estimates there will be 4,500 job losses by 2024. In 2022 and 2023, layoffs will impact more than 400,000 jobs.

In general, the labor market is stable. The unemployment rate in the US was 3.7% in December. Unemployment in technology is low, at just 2.3 percent, according to an analysis by CompTIA, the nonprofit trade association for the U.S. computer industry. However, some technicians are having difficulty finding new jobs until 2023.

Although big tech companies have made significant budget cuts despite years of growth and stability, tech workers can find work in other sectors, such as government, manufacturing, and agriculture. Some laid-off workers choose this path, while others see layoffs as an opportunity to found their own startup.

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