Tech industry leaders such as Google, Microsoft, and Meta are implementing job cuts in 2024 due to various reasons like over-hiring during the pandemic, restructuring for AI focus, and adapting to a changing economic landscape. Companies are prioritizing efficiency and reallocation of resources.

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The tech industry’s layoffs haven’t stopped. After starting in 2023, many companies like Google, Microsoft, Facebook parent Meta and Amazon, among others, are still cutting jobs in 2024. Recently, Microsoft laid off a bunch of people in product and program management roles, impacting multiple teams and geographies. Notably, despite these cuts, major tech companies keep releasing new artificial intelligence (AI) features and products.
Here we have listed a few reasons that CEOs of these tech giants have provided for job cuts.

Facebook parent Meta’s move towards “year of efficiency”

The parent company of Facebook, Instagram and WhatsApp is among the first tech giants that announced job cuts. On the first round of industry-wide layoffs, CEO Mark Zuckerberg said in an interview with “Morning Brew Daily” in February that the company overhired during the pandemic and later realised the benefits of a leaner workforce, leading to more layoffs.
Thousands of employees were laid off in Zuckerberg’s “year of efficiency,” in 2023.

“It was obviously really tough. We parted with a lot of talented people we cared about. But in some ways, actually becoming leaner kind of makes the company more effective,” Zuckerberg said in the interview. (via Business Insider)

Job cuts due to “different economic reality”: Google CEO Sundar Pichai

For Google there are multiple reasons, and also conducted multiple rounds of layoffs, with most recent being in its Cloud unit at the end of May.

In 2023, Google CEO Sundar Pichai said that the company experienced “dramatic growth” during the pandemic, leading to hiring “for a different economic reality” than what was last year. Then in May this year, Pichai told Bloomberg that the company is removing some teams completely to “improve velocity.”

He pointed out that the first half of the year will see more job cuts, which will be at a slower pace in the second half.
He noted that the company is also “reallocating people” to its “highest priorities”, which include AI projects, like the creation of ARM-based CPUs, development as well as implementation of Gemini across Google and Google Workspace apps.

Microsoft cut jobs for restructuring and investments in key areas

Google isn’t the only one to restructure its workforce to make room for AI – its AI rival Microsoft also has ‘blamed’ the new technology for job cuts.
Microsoft CEO Satya Nadella in a memo last year said the company while consumers are also optimising their digital spends, the onset of new technology is forcing the company to take such a stand.

“First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less. At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform,” Nadella said, adding that the company will continue to hire in “key strategic areas.”

Layoffs at IBM, Salesforce and other companies

In May 2023, IBM CEO Arvind Krishna predicted AI and automation replacing 30% of HR and non-customer facing roles within five years. The company laid off employees in March 2024.
Discord CEO Jason Citron mentioned in a January memo that the company’s workforce had grown five times since 2020 – which may be linked to recent layoffs.
Just like Zuckerberg, Salesforce chief executive Marc Benioff blamed over-hiring during the pandemic for layoffs in 2023. He stated revenue grew, but the economic downturn required a smaller workforce.
Dropbox CEO Drew Houston, in a 2023 layoff announcement, said their next phase needed a different skill set focused on AI and early-stage product development.