Home Business No, the Great Tech Layoffs of 2023 Aren’t Happening Again

No, the Great Tech Layoffs of 2023 Aren’t Happening Again

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So far, 2024 is off to a start that looks a lot like 2023—with a week full of job cuts from tech companies.

Duolingo cut 10 percent of its contractors earlier this week, citing artificial intelligence as part of the reason. Twitch announced a cut of 500 people, and its parent company, Amazon, also made moves to lay off hundreds of employees across Prime Video and MGM Studios on Wednesday.

Google followed, also laying off hundreds of employees working on its Google Voice assistant, with additional reorganization affecting its hardware teams working on augmented reality, the Pixel phone, Fitbit watches, and the Nest thermostat. On Thursday, Discord said it would lay off 17 percent of its staff after hiring too quickly in recent years.

It’s a flurry of announcements that feels all too familiar, but experts say these layoffs don’t necessarily mean 2024 will prove as brutal as recent years. The job cuts are smaller than those made in late 2022 and 2023, when companies like Google, Amazon, and Meta laid off thousands of workers after years of rapid growth. And with a steady labor market in place, they don’t necessarily point to an ongoing slide in tech jobs, but instead to shifting priorities within companies.

The tech sector is looking healthy overall since consumer habits have stabilized after rapid changes during the Covid-19 pandemic, says Rachel Sederberg, senior economist with labor analytics firm Lightcast. Some of these latest cuts target specific departments and products, and may be just a part of doing business.

“Businesses make choices about what they want to focus on all the time, and sometimes they come as job cuts,” Sederberg says. Companies may continue to make these smaller, targeted cuts in coming months, but she says she doesn’t expect to see layoff “contagion” across tech companies or other industries.

This isn’t sweeping rightsizing, as tech firms did in 2022 and 2023, says Daniel Keum, associate professor of management at Columbia Business School. As companies look for ways to utilize and monetize automation and generative AI, “there’s rebalancing that’s taking place” with jobs and priorities, Keum says. Last year, generative-AI-related job posts increased quickly, even as the tech industry grappled with many job losses.

Google made changes throughout the second half of 2023 “to become more efficient and work better” and to realign with product priorities, company spokesperson Courtenay Mencini tells WIRED. “We’re responsibly investing in our company’s biggest priorities and the significant opportunities ahead.” Some of Duolingo’s cuts came because a “contractor’s work was no longer needed due to changes in how we generate and share content,” says Sam Dalsimer, a company spokesperson, while others ended as projects concluded.

Layoffs.fyi, which tracks job cuts in the tech industry, estimates that 4,500 jobs have been lost so far in 2024. Throughout 2022 and 2023, layoffs affected more than 400,000 roles.

Across the board, the job market is steady. The unemployment rate in the US was 3.7 percent in December. And tech job unemployment is lower, at just 2.3 percent, according to an analysis from CompTIA, a nonprofit trade association for the US IT industry. Still, some tech workers struggled to find new gigs in late 2023.

Although big tech firms have made large cuts, going against years of growth and stability, tech workers could find jobs in other sectors, like government, manufacturing, and agriculture. Some laid-off workers have chosen these paths, and others have approached layoffs as opportunities to found their own startups.