Tech companies layoffs big in January as Staffs rally lifts Alphabet | Google, Ebay, Meta

Tue Jan 30 2024 by Ignatius Emeka

Despite the surging stock values of tech giants such as Alphabet, Meta, and Microsoft, which have soared to unprecedented heights, surpassing a combined market value of $3 trillion, the tech industry is grappling with a wave of layoffs. According to Layoffs.fyi, a website monitoring tech workforce reductions, January alone witnessed 94 tech companies shedding 24,934 employees—the highest figure since March of the previous year, when 38,000 tech professionals lost their jobs.

This trend persists, with SAP revealing plans to impact 8,000 employees through job changes or cuts, and Microsoft downsizing its gaming division by 1,900 positions. Fintech startup Brex, despite being highly valued, also implemented a workforce reduction of 20%, while eBay trimmed 1,000 jobs, equivalent to 9% of its full-time staff. eBay's CEO, Jamie Iannone, explained in a memo to employees the necessity to "better organize our teams for speed—allowing us to be more nimble, bring like-work together, and facilitate quicker decision-making."

Earlier in January, Google confirmed the elimination of several hundred jobs across the company, and Amazon cut hundreds of positions in its Prime Video, MGM Studios, Twitch, and Audible units. Unity, a game engine developer, announced a 25% reduction in its workforce, and Discord, a popular gaming chat platform, is letting go of 17% of its employees.

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In January of the preceding year, layoffs reached their zenith, with 277 technology companies trimming nearly 90,000 jobs. This downturn occurred as the tech industry grappled with the conclusion of a bull market spanning over a decade. The majority of downsizing initiatives occurred in the initial quarter of 2023, and the frequency of job cuts steadily decreased each month until September, experiencing a slight upturn towards the year's conclusion.

One plausible rationale for the January upswing is that companies, while budgeting for the upcoming year, have realized they can achieve greater efficiency with reduced resources.