In August 2024, the technology sector experienced substantial job losses, with over 27,000 positions cut across more than 40 companies, including major players like Intel, IBM, and Cisco.
The wave of layoffs underscores ongoing challenges in the industry amid shifting market dynamics and economic uncertainties.
Intel, one of the largest tech firms, announced plans to reduce its workforce by 15%. Cisco Systems revealed it will lay off approximately 6,000 employees, or about 7% of its global workforce, as part of its strategic pivot towards high-growth areas such as artificial intelligence (AI) and cybersecurity. This marks Cisco’s second significant round of layoffs this year. Cisco CEO Chuck Robbins expressed optimism about future demand for the company’s networking equipment, despite the current workforce reduction.
IBM is discontinuing its research and development operations in China, resulting in over 1,000 layoffs. This decision is driven by a decline in demand for IT hardware and challenges in expanding within the Chinese market. IBM has assured that customer support in China will remain unaffected, focusing instead on private enterprises and select multinationals in the region.
GoPro is set to cut about 15% of its staff, approximately 140 employees, as part of a restructuring plan aimed at reducing operating expenses by $50 million for the fiscal year 2024. Apple has laid off around 100 employees from its services division, particularly impacting teams associated with Apple Books and related engineering roles, as the company redirects resources towards AI initiatives.
Dell Technologies is reportedly reorganizing its sales teams and establishing a new AI-focused group. While rumors suggest Dell may have reduced its workforce by approximately 12,500 employees, the company has not confirmed these figures.
In addition, smaller tech firms are also facing significant workforce reductions. ReshaMandi, a Bengaluru-based fabric startup, has laid off its entire staff due to financial difficulties. Brave, a web browser startup, has reduced its workforce by 14%, and ShareChat, a social media company, has cut around 30-40 jobs, or roughly 5% of its workforce.
The August layoffs represent the highest monthly total for the month in 15 years, according to outplacement firm Challenger, Gray & Christmas. The firm reported that planned job cuts in August surged to 75,891, marking a 193% increase from July. While hiring announcements saw a slight increase, they remain significantly lower compared to previous years, indicating a broader trend of economic uncertainty and cost-cutting measures within the tech industry.
Andrew Challenger, senior vice president at Challenger, Gray & Christmas, noted that the surge in layoffs reflects growing economic concerns and shifts in market conditions. Despite overall job growth in the US economy, recent data suggests a softening labor market, with hiring slowing and initial claims for unemployment benefits remaining elevated.
With input from CNBC and the Economic Times.
