Is the worst over for tech job losses?

Job losses in the tech industry were down 65% year-on-year in January, providing hope that the worst of the cull is over.

In January 2023, worldwide job losses in IT peaked at 89,709, with 277 different companies announcing layoffs. This January, the figures have fallen to 30,995 job losses, with 118 companies declaring redundancies. The figures come from Layoffs.fyi, a site which has been tracking tech industry job losses since the Covid-19 pandemic.

January is generally a peak time for job cuts, with companies both reluctant to announce redundancies over the holiday season and reviewing their operations at the start of a new year. The massive decrease in tracked job cuts is a hopeful sign that the market is beginning to stabilise.

Bad year for tech jobs

2023 was by far the worst year for tech job losses since the start of the pandemic. There were more than 260,000 tech job cuts tracked by Layoffs.fyi in 2023, more than half of those coming in the first quarter of the year.

By comparison, there have only been just under 34,000 job losses recorded so far in Q1 2024, at almost the halfway point through the quarter.

Tech job losses were minimal after the start of the pandemic, with 2021 seeing fewer than 20,000 job cuts across the entire year. But the figures rose sharply through 2022, peaking in Q1 2023, before dropping back down in every successive quarter last year.

The AI effect?

Even though the job loss figures are declining, the contraction in the industry continues. And that includes some of the biggest and most profitable firms. SAP, PayPal, Microsoft and Google are among the companies to have announced four-figure job losses since the start of 2024.

There is a suggestion that the big tech companies are adjusting their workforce to focus on AI. That doesn’t necessarily mean that human roles are being replaced by AI, but that companies are letting staff go so that they can reinvest in employees with AI-related skills.

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