Date: February 20, 2024
The world has witnessed some of the most frequent mass layoffs in the last 4 years. The first two of them were led by prolonged lockdowns globally. The last two years witnessed a rapid surge in AI development, followed by mass layoffs across Unicorns, enterprises, and startups. As AI efficiency is being analyzed, more and more jobs are being cut across the board.
Tech giants like Meta, Google, X, and many others have conducted multiple rounds of layoffs since 2020, resulting in thousands of skilled labor cutoffs. In just two months in 2024, over 34,000 employees have been let go by companies, with business restructuring as the most common reason. Mark Zuckerberg, CEO of Meta, explained in a podcast with Morning Brew that the AI boom did not lead to the recent layoffs. Instead, he continues to explain what the primary reasons are. Here you go.
Companies are still adjusting to the post-pandemic era, and new work cultures are emerging due to the high demand for hybrid work environments among newer professionals. Another common practice in tech giants was the accumulation of top talent even without enough supply of work in the existing business prospect. This has led to the hoarding of employees without much on-ground impact, causing a difference in the efficiency anticipated vs the outcome experienced.
As part of the solution, companies are choosing a leaner structure and have already started benefiting from them. This restructuring requires painful farewells even if the talent they let go was a top market performer. Without a strong need, companies are ready to let go of any employee from the bottom of the hierarchy to the top dogs.
Overhiring is not the reason behind these layoffs, and neither is AI. AI has become essential to many professionals’ daily tasks, but it is far from achieving the efficiency to trigger mass layoffs of this scale. Mark Zuckerberg calls 2024 the “year of efficiency”. The company’s headcount has been reduced by 22% year-on-year, with 67,317 left in 2023. The drops in numbers are continuing as 2024 unfolds itself. Mark explains that his layoff strategy aiming for a leaner business structure has also led to several management-level layoffs.
While the world’s top talents are growing skeptical about the potential of AI to replace them, the tech leaders are confident that they are not connected. Some factors may weigh on the importance of AI in improving overall creativity and efficiency, but the human requirement is not diminishing anytime soon. However, more than 32000 workers have lost their jobs in 2024 till now. If what Mark says is true, then the restructuring will continue till modern businesses reach their ideal lean state.
Arpit is a dreamer, wanderer, and a tech nerd who loves to jot down tech musings and updates. With a logician mind, he is always chasing sunrises and tech advancements while secretly preparing for the robot uprising.
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