Why widespread tech layoffs keep happening despite a strong U.S. economy | CNBC
In 2024, the tech sector is experiencing significant change and growth. Nvidia, a leading tech company, has surpassed earnings expectations, riding the ongoing artificial intelligence (AI) boom. This success is mirrored in the Nasdaq index, which has surged over 8 percent since the beginning of the year, indicating a robust performance in the tech-heavy market.
Despite the positive indicators for the U.S. economy, with 353,000 jobs added in January—surpassing economist predictions—there’s a shadow over the tech workforce. Layoffs in the tech industry have surged, signaling a profound transformation. Jeff Shulman, a professor at the University of Washington’s Foster School of Business, points to shifts in the future of work and technology, as well as changing investor preferences, as driving factors behind these layoffs.
The numbers speak volumes: in 2024 alone, over 42,000 tech employees have been laid off, averaging more than 780 layoffs per day. This figure surpasses the rate of terminations in 2023, which averaged around 720 daily layoffs. The rise in layoffs can be attributed to various factors, with AI taking center stage. Companies are reallocating resources to invest in the infrastructure needed to support AI advancements, such as chips and servers.
Interestingly, despite the layoffs, companies have not faced adverse consequences. They’ve seen their stock prices rise—a phenomenon attributed to investor sentiment and market dynamics. This complex interplay between technological innovation, investor expectations, and workforce dynamics underscores the intricate landscape of the modern tech industry…………
[read more]
Rising Dough
How do shifting priorities in the tech industry, such as the emphasis on AI development and investor appetite for growth versus profitability, impact the job market and workforce dynamics?
*Click on the “Full Loaf” icon to read the full article! After you read the full article, let us know your thoughts.
Share this content:
The job market and workforce dynamics will decline rapidly at this rate if a computer can solve every problem in the world and a human isn’t valued enough to work for a company or in that type of work force. This goes for a lot of work forces now because technology is a big thing in this era.
Shifting priorities in the tech industry, like the focus on AI development and the balance between growth and profitability, have a significant impact on the job market and workforce dynamics. Companies emphasizing AI development may seek employees with specialized skills in artificial intelligence, creating new job opportunities in that field.