July 2024 marked a significant shift in the tech industry as over 8,000 jobs were cut across 34 technology companies. The total number of layoffs this year has now soared to 124,517 from 384 companies globally. This wave of job losses raises important questions about the underlying causes of this trend.
Economic Pressures and Strategic Shifts
A major factor behind these layoffs is the ongoing economic uncertainty impacting the tech sector. Once seen as a stable and ever-expanding field, the technology market is now grappling with slower consumer spending and a cooling in technology investments. Companies are being forced to reassess their workforce and cut costs to adapt to these new economic realities.
Intel’s Cost-Cutting Measures
Intel is leading the charge with its decision to lay off over 15,000 employees, which constitutes more than 15% of its workforce. This drastic move is part of a $10 billion cost-saving plan aimed for 2025. Intel’s CEO, Pat Gelsinger, attributed the layoffs to lower-than-expected revenue growth and difficulties in leveraging AI trends. The company intends to complete most layoffs by the end of 2024, offering voluntary retirement and departure options to some employees.
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Microsoft and UKG’s Downsizing
Microsoft has also been active in reducing its workforce, with around 1,000 employees laid off in June and further cuts in July. The company has not disclosed the exact numbers for the latest reductions but confirmed that roles related to product and product management were affected. Meanwhile, UKG, a software giant based in Massachusetts, carried out the largest layoffs of the month, cutting 2,200 jobs or about 14% of its workforce. This decision reflects the company’s need to refocus on critical growth areas to support its long-term strategy.
Impact of Inflation and Rapid Change
Inflation and rising interest rates have also played a crucial role in these job cuts. Companies are under pressure to reduce operational costs and seek efficiencies to maintain financial health. Dyson, the British appliance manufacturer, announced it would cut around 1,000 jobs in the UK, citing intense competition and rapid innovation as reasons for its restructuring.
Industry Realignments and Company-Specific Issues
Other notable layoffs include Kaspersky, which is exiting the U.S. market due to a government ban on its software, and Bengaluru-based startup ReshaMandi, which laid off 80% of its staff after failing to secure Series B funding. Similarly, Koo, an Indian microblogging platform, shut down completely after acquisition talks fell through, impacting around 200 employees.
