The trend of tech layoffs is still going strong in 2024. Job losses in tech were significant in 2022 when 1,064 companies laid off about 165,296 employees. Things worsened in 2023, with 1,191 companies cutting 263,180 jobs—a 59% increase from the previous year. As of May  2024, more than 89,000 jobs have been cut by 306 companies, according to the lay-offs tracking website, layoffs.fyi. Big names like Tesla, Google, Amazon, Microsoft, and TikTok laid off thousands of workers in the first months of 2024.

Why are there so many layoffs?

So why all these layoffs? The problem is rooted in the pandemic, which came with lots of challenges and opportunities. Many companies experienced growth and hired more employees to meet customers' demands, but this caused overstaffing when demands were reduced and economic conditions got tougher. Businesses began to downsize, especially because overhead costs increased due to the economic downturn and inflation, which is why we’re seeing so many layoffs today.

Reasons the tech sector has seen layoffs

Economic downturn

Just like in other industries, tech companies are not immune to economic downturns. When demand drops, profits take a hit, and many tech firms respond by cutting their workforce to save on costs.

Over bloated workforce

During the pandemic, tech companies went on a hiring spree because of the surge in online activity from people working from home. But now that things are back to normal, these companies realize they hired too many people and are downsizing as a result.

Higher Interest rates

In July 2023, the Federal Reserve raised interest rates to 5.5% in the U.S., the highest they've been in 22 years. This makes borrowing more expensive for companies, which in turn affects how much investors are willing to put into companies. Sometimes, investors even push companies to lay off employees to cut costs.

Inflation

Inflation rates drive up the costs of goods and services and for tech companies, the cost of hardware and other items required in production. To cope with these higher expenses, companies often reduce their workforce to save money.

Increased AI Adoption and Impact on Jobs

Most companies that lay off their staff don’t explicitly say the cuts were due to AI automation, but the signs are there. Jobs in customer service, content writing, and design have been cut. For example, layoffs at Google, which heavily impacted the company's ad sales division, coincided with more deployment of AI across customer care and sales processes. Also, last year, Swedish furniture company IKEA announced that it was training call center employees to become interior design advisors. This was after all routine customer inquiries were delegated to an AI bot named Billie.

Job losses to AI in Tech companies are more complicated; tech companies are downsizing to have more money to invest in expensive AI talent and GPU computer chips to train and run AI applications. An example is Salesforce, which laid off 700 employees in January 2024. According to the company’s Chief people officer, it is actively recruiting for positions such as prompt engineers, AI trainers, and AI ethical architects. This suggests that the company has shifted its focus from providing tech sales jobs to hiring AI talent, as part of its investment in Artificial Intelligence.

What to do if you have been laid off

Finding jobs in a tough economy can be difficult, especially tech jobs. However, getting a new job is not impossible; many tech companies continue to hire despite the layoffs. If you have lost your job in tech and are looking for another job, you want to break into tech, or change your field, here are some of the things you can do.

Update your resume

While this might sound cliche, your resume is your first introduction to hiring managers and recruiters, so you want it to make that resume stand out and shine. Ensure your resume is in the right format, has details of your professional experience, and showcases your skills and certifications. Write resume sections that align your skills with the different job positions you apply to. A one-size-fits-all resume doesn't work anymore, so it’s better to have multiple versions of your resume saved for applying to different jobs. Recruiters today focus on your core skills, certifications, data skills, and AI skills, so if you have these, emphasize them on your resume.

Get the most sought-after skills

Today, companies are on the lookout for specific tech skills. These include skills in artificial intelligence, machine learning, data science and analytics, cloud computing, programming languages such as Javascript and Python, virtual and augmented reality, and DevOps methodologies. To get started, explore online courses that teach the basics, some of which are free. You can later proceed to the more comprehensive, paid courses. Another great option is enrolling in a boot camp where you’ll learn about new technologies and tools. Getting these skills can make landing a tech job easier.

Focus on companies with recent funding

When you’re job hunting, checking job websites such as Indeed, Glassdoor and CareerBuilder can lead you to companies that are hiring. However, here is another thing you can try: “Follow the money”. Look for tech companies that have just secured new funding; they might be hiring soon. You can use Startup databases such as Crunchbase, AngelList and CB Insights for this. Also, keep tabs on News outlets like TechCrunch and Forbes - they often report on funding rounds and investments. That way, you can find companies with open roles and possibly land a job faster.

Consider relocation

While many tech jobs allow employees to work remotely, you might need to be flexible in a tight job market and consider companies that want employees to work hybrid or fully onsite. Also, think about relocating to places where the available jobs are. Look beyond the cities that are popular as job hubs; there are other cities friendly to job seekers. These cities have high job growth, earnings growth, lower unemployment and more affordable housing.

Work with a tech recruiter

Teaming up with a recruiter will give you access to a wider range of opportunities when seeking a tech job. The recruiter can offer valuable tips for your interview with the companies and give you an idea of the salaries to expect. You can connect with a recruiter on LinkedIn - just make sure to include a message about why you want to connect. You can also keep an “open to work” badge on your LinkedIn page to attract tech recruiters who may be searching for candidates. Beyond LinkedIn, you can ask your network or do a simple Google search to find recruiters in your area.

Don’t stop looking

Keep up with the basics of a job search and don’t let news of layoffs discourage you. Keep networking and applying for suitable opportunities. You can create a schedule to allocate time to the job search tasks, such as resume updates, creating a list of companies and roles, and submitting applications. You’ll also need to keep track of your activities on a spreadsheet.

Finding a tech job in a tough economy can seem daunting, but it is not impossible. Equip yourself with skills employers are looking for through online courses and position yourself for more opportunities by networking and focusing on companies that are most likely to hire. With the right attitude and determination, you’ll land a role that will be suitable for you within a reasonable time.