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shockingly, the tech industry, once the unstoppable engine of modern innovation, laid off more than 124,000 employees in 2024 alone. what’s driving this wave of layoffs, and what does it mean for the future of work in one of the world’s most dynamic industries?

overview of layoffs

in august 2024, intel announced a 15% layoff of its global workforce, about 17,500 people, which caused an uproar in the market. a few days later, cisco announced plans to lay off 7% of its employees, expected to exceed 6,300 people. this is the company's second round of layoffs this year. the company will shift its focus to fast-growing fields such as artificial intelligence (ai) and cybersecurity. in early february 2024, cisco laid off more than 4,000 employees.

these are not isolated incidents. according to layoffs.fyi,384 tech companies have laid off more than 124,000 employees by 2024.more than 428,400 tech workers will lose their jobs in 2022 and 2023. while the broader labor market has shown some resilience, layoffs in the tech industry have been particularly pronounced due to the sheer size of these companies. even a small percentage of layoffs means thousands of people's homes and lives have been upended.

why are layoffs happening?

a number of factors came together to create the perfect storm for the current wave of layoffs in the tech industry:

1. inflation and rising interest rates:in an effort to curb the highest inflation in 40 years, the federal reserve has taken aggressive interest rate hikes in 2022, measures that have had far-reaching intended and unintended consequences. while these measures have begun to curb inflation, they have also significantly increased the cost of borrowing and servicing debt. businesses, especially those in the technology sector, are now forced to scale back their growth investments and hiring as they divert funds to repay debt. for technology companies that borrowed heavily during nearly a decade of near-zero interest rates and abundant capital, the impact has been severe, leading to deep cost-cutting, austerity measures, and inevitable layoffs.

2. recession and fear of recession:despite some areas of strength, the instability of the u.s. economy, compounded by the turmoil of the upcoming november presidential election, has complicated the picture. problems with the u.s. government debt, geopolitical tensions in ukraine and the middle east, and the lingering effects of the pandemic have heightened fears of a recession, prompting companies to retrench. in the tech industry, where profitability per employee is critical, layoffs have become a necessary cost-cutting measure for companies to cope with economic uncertainty.

3. artificial intelligence factor:artificial intelligence is profoundly reshaping the tech landscape, creating both opportunities and threats. while ai promises to create new jobs and increase productivity, it also poses significant risks to those who fail to adapt. ibm’s decision to cut 3,900 jobs in its marketing and communications division while freezing hiring for positions that could be replaced by ai is a stark illustration of this trend. the shift toward ai-driven efficiency is forcing companies to rethink their workforce strategies.

4. outsourcing and offshoring:as the u.s. workforce may have inadvertently weakened its position during a wave of resignations and quiet departures, coupled with the ongoing debate and drama about returning to physical offices, companies are increasingly turning to local talent in latin america, eastern europe, the middle east, africa, and southeast asia, where they can hire highly educated workers at a fraction of the cost. the threat to american jobs comes not only from artificial intelligence, but also from a global workforce willing to work hard, adapt, and deliver.

impact on individuals

the personal impact of layoffs is deep and profound. behind every statistic is a person — a friend, a colleague who may have a family to feed, college to pay, and consumer bills to pay. these are often highly skilled professionals who now face an uncertain future. this wave of layoffs is reminiscent of the dot-com bust of the early 2000s, but with one key difference:today’s tech workers are older, more experienced, and often more entrenched in their careers.the psychological and financial burden can be overwhelming, but there is no need to be overly concerned. for example, one of my colleagues, a senior software engineering project manager with more than 10 years of experience, found herself out of work overnight and is now navigating the uncertainty of the job market. i recommended that she explore specific opportunities in the data center, cybersecurity, customer experience outsourcing, and data science industries, which are areas with strong demand for skilled u.s. project managers. this moment calls for a reset in how we respond to this crisis and prepare for the next phase of our industry.

the way these layoffs were handled has drawn harsh criticism. in many cases, companies kept employees in the dark for weeks or even months, creating an unhealthy atmosphere of fear and uncertainty. it was a grim reminder that despite claiming that employees are their most valuable asset, companies often sacrifice their workforce first in times of crisis — even when reporting record profits. microsoft, for example, laid off 1,900 employees five days before reporting a 17.6% increase in revenue to $62 billion, while amazon laid off 1,000 employees even as revenue grew 14% to $170 billion. even worse,rumors that some companies were reducing severance packages before layoffs further eroded trust.

what is the key to the future of work?

the current wave of layoffs raises critical questions about the future of work in the tech industry. will companies continue to prioritize ai investments at the expense of human workers? will the industry return to its previous growth trajectory, or is it entering a new era of consolidation and efficiency? most importantly,how can tech companies better support their employees during these turbulent times?

as we address these challenges, it’s clear that the technology industry is at a crossroads. the decisions made today will shape the future of the industry and millions of workers.

during these uncertain times, resilience is critical for those who have been impacted. equally important, communities need to come together with compassion — helping each other identify new opportunities, providing resume reviews, offering career advice, and setting realistic expectations. while the tech industry may be contracting, demand for skilled workers remains strong. for example, data center construction is in stronger demand than ever due to the endless thirst for artificial intelligence. for those who have been impacted, it’s also worth considering starting new areas of business. whether it’s pivoting to a new role, upskilling in ai, or exploring emerging fields, there are countless paths to success. the key is to stay adaptable, keep looking forward, and continue to leverage your network and resources.

the tech industry has always been defined by its ability to innovate and reinvent itself. now, facing one of its greatest challenges, it must do so again—not just in terms of products and services, but in how it values ​​and treats its workforce. the companies that succeed will not just be those that weather the current storm, but those that emerge stronger, leaner, and with more resilient internal cultures. this is an opportunity for industry leaders and workers to seize this transformational moment together and build a stronger, more sustainable future together. after all, it’s people who make innovation and growth possible.