AI and cost cutting biggest reasons why tech layoffs have surged by 136 per cent in 2024, reveals study

ai and cost cutting biggest reasons why tech layoffs have surged by 136 per cent in 2024, reveals study

AI and cost cutting biggest reasons why tech layoffs have surged by 136 per cent in 2024, reveals study

The tech sector has witnessed over 32,000 employee layoffs so far. What’s the reason? The same factors that made 2023 a difficult and uncertain year for job security. And at play were the factors including mismanaged recruitments, struggles with ad revenue, and a faltering economy that forces companies to cut costs, often through layoffs.

However, while companies blame the recession for hindering growth, there’s another major factor: the introduction of artificial intelligence (AI) and machine learning (ML) models. More than the economic slowdown, AI transformation became the driving force behind job cuts last year and continues to be a significant factor this year.

According to a survey published by US firm Challenger Gray, the emergence of artificial intelligence (AI) is posing a significant threat to white-collar jobs. Employees in various fields, including programmers, company management, lawyers, accountants, finance and insurance professionals, consultants, and others, are facing the risk of job displacement due to automation.

The report highlights that US companies laid off a staggering 82,307 people in January, representing a massive 136 per cent increase from December. In January, the financial sector led in job cuts, reporting 23,238 layoffs, the highest figure since September 2018. Following closely behind was the technology industry, which announced 15,806 cuts, marking a substantial increase from the previous month.

The food production sector also faced challenges, witnessing 6,656 layoffs, largely attributed to rising costs and automation. Similarly, retailers announced 5,364 job cuts, a significant uptick compared to the previous month’s figure. In the media, while overall layoffs decreased, news outlets saw a surge in job cuts, with 528 layoffs in January, the highest monthly total in nearly a year.

The reason behind these cuts? In January, the main cause of job losses was cited to be  “restructuring”, with 28,329 layoffs, followed by 14,555 cuts due to “closing” of plants, stores and units. However, artificial intelligence was blamed for 381 layoffs alone in January. Challenger recorded  that around 4,628 layoffs are attributed to Artificial Intelligence since May 2023, when it started tracking this reason. The companies either shifted  to developing AI and hiring in the related roles or replaced some tasks and roles with it.

“The impact of rapidly advancing artificial intelligence adoption is beginning to be felt from a jobs perspective, particularly in Media and Tech, but truly across sectors. That said, companies are not outright blaming AI for many layoff decisions,” said Challenger.

Interestingly, while AI is being blamed for job cuts, the growing sector of AI and Machine learning is also causing companies to increase hiring in related fields.  According to CompTIA’s report, the demand for AI and machine learning skills is soaring among the companies. In the related field, there were 33,727 job openings in January alone, which is the highest monthly growth in a year.

Watch Live TV in English

Watch Live TV in Hindi

News Related

OTHER NEWS

Guru Nanak Jayanti: Rishi Sunak Highlights Punjabi Heritage In Message, Trudeau Extends Greetings

In a greeting from 10 Downing Street on the occasion of Guru Nanak Jayanti, British Prime Minister Rishi Sunak mentioned his Punjabi Indian origin, news agency PTI reported. The 43-year-old ... Read more »

What US easing sanctions on Venezuela, home to world’s largest oil reserves, could mean for India

This report is the second of a three-part series on recent Indian engagement in the Latin American and Caribbean (LAC) region. New Delhi: The US’ decision last month to ease ... Read more »

Rajshri Deshpande dedicates OTT award to innocent lives lost in Gaza, Palestine

Rajshri Deshpande dedicates OTT award to innocent lives lost in Gaza, Palestine Actor and social worker Rajshri Deshpande won the Best Actor, Series (Female) award for Netflix’s ‘Trial By Fire’. ... Read more »

‘Ramchandra Keh Gaye…’: From Jan 1, RSS to Spread Word of God, Ayodhya Inauguration Among 10 Crore People

‘Ramchandra Keh Gaye…’: From Jan 1, RSS to Spread Word of God, Ayodhya Inauguration Among 10 Crore People In its effort to take the Ram Janmabhoomi message to households across ... Read more »

Ace designer Rohit Bal critical, on ventilator: report

Ace designer Rohit Bal critical, on ventilator: report Celebrated fashion designer Rohit Bal is in critical condition and is on ventilator support, HT City reported, quoting sources. He has been ... Read more »

Bengaluru: Traffic Advisory Issued, Parking Restrictions In Place As Samyukta Horata Samiti Holds Protest | Details

Bengaluru: Traffic Advisory Issued, Parking Restrictions In Place As Samyukta Horata Samiti Holds Protest | Details The Bengaluru Traffic Police has issued a traffic advisory for November 27 and 28 ... Read more »

Vistara Flights Diverted Due To Air Congestion At Delhi Airport | DETAILS

vistara flights diverted due to air congestion at delhi airport | details Delhi: Two Vistara flight has been diverted to Lucknow and Jaipur due to bad weather and air congestion ... Read more »
Top List in the World