Tech is going to have a huge year in 2024. Nvidia recently exceeded analyst earnings forecasts. The growth in artificial intelligence is still going strong. The tech-heavy Nasdaq index has increased by over 8% so far this year.

The U.S. economy is also performing remarkably well; in January, it added 353,000 jobs, far more than economists had predicted. Warmer-than-expected inflation numbers may also prevent the Fed from reducing interest rates as quickly as the market anticipates, indicating that the economy is still robust enough to withstand lengthier periods of tighter monetary policy.
For tech professionals, however, it’s a different story.

“The layoffs to the start of 2024 signal a dramatic shift in the tech industry,” said Jeff Shulman, professor at the University of Washington’s Foster School of Business.

“We’re going to continue to see layoffs happen as the future of work has changed, as the future of technology has changed and as investors’ appetite for risk and growth versus profitability has dramatically changed as well.”

In 2024, there will be more layoffs in the tech sector than there were terminations in 2023. Approximately 42,324 IT workers have been let go so far in 2024, according to Layoffs.fyi, a website that tracks layoffs in the tech sector. In 2024, that works up to more than 780 layoffs every day on average. Approximately 263,000 IT workers were let go in 2023, or roughly 720 people every day on average.

The churn is caused by multiple factors. AI is leading the way. To finance the chips and servers that run the AI models underlying these new technologies, businesses must set aside money.

The stock market effect is another. Layoff-related companies have not suffered negative effects from investors or their financial statements. Actually, their reward has been an increase in stock prices.

(Adapted from CentralChats.com)