The global tech industry, once heralded for its rapid growth and job creation, is now grappling with an unexpected surge in layoffs, signaling a paradigm shift in the aftermath of the generative AI revolution. In a departure from previous years, tech companies globally, from Big Tech giants to nimble startups, have adopted a grim holiday season tradition of downsizing their workforce. This trend, intensified by the widespread adoption of generative AI technologies, threatens millions of jobs and reflects the profound impact of automation on employment.
Rising Layoffs in the Tech Sector
Over the last two years, tech companies have terminated the employment of more than 425,000 workers worldwide, with a staggering 36,000 employees facing the axe in India alone. The decision to cut jobs, which remained relatively subdued during the festive seasons of 2021 and 2022 amid the global economic downturn, has taken a more aggressive turn in the opening months of the New Year.
Global Layoff Statistics
According to layoff.fyi, a platform that meticulously tracks job cuts in the tech sector, 1,178 tech companies have laid off 260,771 employees globally in 2023 as of December 26. In the preceding year, 1,061 tech companies terminated the employment of 164,769 workers. On average, more than 582 employees lost their jobs every day over the past two years, equating to over 24 workers losing employment every hour.
Sectors Hit the Hardest
The impact of layoffs has been felt most acutely in the retail-tech, consumer-tech, and fintech sectors. These areas, once considered beacons of innovation and growth, have become epicenters of job losses as companies grapple with economic uncertainties and the relentless advancement of generative AI technologies.
Prominent Layoffs in 2023
Several high-profile tech companies have made headlines for their significant layoffs in 2023. Paytm, a leading fintech platform, recently laid off over 1,000 employees as part of a cost-cutting strategy. Social media platform ShareChat implemented a strategic restructuring plan, resulting in the departure of 200 employees, approximately 15% of its workforce.
Game streaming platform Loco faced a substantial downsizing, cutting 36% of its staff or 40 employees from a total of 110. Adda247, an edtech platform backed by Google, laid off around 250-300 employees across various verticals, while education technology giant Byju’s underwent a significant business restructuring exercise, leading to the termination of 4,000-5,000 employees.
Dunzo, a quick-grocery delivery provider, reportedly laid off an additional “150-200” employees due to severe cash crunch in September. This followed earlier job cuts that had affected nearly 400 employees earlier in the year, bringing the total number of job losses to a substantial figure.
As the global tech industry grapples with the impact of generative AI and automation, the human cost is becoming increasingly evident. The rise in job losses during the holiday season, historically a period of respite for employees, underscores the urgency for both industry leaders and policymakers to address the challenges posed by technological advancements. The adoption of proactive measures, such as upskilling and reskilling programs, is crucial to mitigate the adverse effects of automation and ensure a more inclusive and sustainable future for the workforce in the tech sector.