The tech industry is currently facing a shocking reality. In August many tech companies, including giants like Intel and Apple, announced significant layoffs, signalling that even the most successful companies are not immune to economic pressures.
According to layoffs tracker Layoffs.fyi, as of August 31, 422 tech companies have laid off a staggering 1,36,782 employees in 2024 alone. These numbers show a troubling situation, especially since these layoffs are happening at big companies. It looks like the tech industry is being forced to make difficult choices to survive.
The reasons behind these layoffs vary, but a common thread is the economic pressure that these companies are facing. As the global economy continues to fluctuate, even tech giants are finding it difficult to maintain their previous levels of revenue growth. This has led to a sharp focus on cost-cutting measures, including workforce reductions, to ensure profitability in uncertain times.
Also read: Intel to layoff over 15,000 employees as part of its $10 billion cost-saving plan
The fact that companies like Intel and Apple are laying off employees is particularly shocking. Both have been industry leaders for decades, setting trends and pushing the boundaries of technology. However, even they are not immune to the economic challenges that have led to these job cuts. This begs the question: if these giants are struggling, what does this mean for the rest of the industry?
Earlier this month, Intel announced a significant restructuring plan that includes laying off approximately 15,000 employees, or 15% of its workforce, as part of an effort to achieve $10 billion in cost savings by 2025. This move comes in response to financial challenges, including slower-than-expected revenue growth and increasing operational costs.
The layoffs are expected to be completed by the end of this year, with the company focusing on reducing operational costs, simplifying its business portfolio, and eliminating inefficiencies. Intel will also suspend its stock dividend to prioritise investments in the business and maintain key growth areas.
Also read: Apple laid off over 100 employees to reduce workforce in Digital Services and Books Teams
Apple, a company known for its stability and rarely resorting to layoffs, surprised many by letting go of over 100 employees. This move is particularly significant because it signals that even the most financially secure tech companies are feeling the heat from the current economic climate.
Unlike Intel, Apple’s layoffs are relatively small in number, but they are nonetheless an important reminder of the challenges facing the tech industry. The major impact was on the teams that were responsible for the Apple Books app and Apple Bookstore, as well as those working for Apple News. Even some engineering roles were removed from the entire setup.
These layoffs by Intel and Apple show that no company, no matter how successful, is entirely safe from economic pressures.
Among the companies that laid off employees in August was IBM. IBM closed its China R&D operation, impacting over 1,000 jobs. This move came as the company was facing declining demand for its hardware and difficulties in growing markets like China.
Dell is also on the list of tech companies that made cuts this month. Dell reportedly cut jobs as part of a reorganisation of its sales teams, which includes a new group focused on artificial intelligence products and services.
Also, Sonos reportedly laid off about 100 employees this month, impacting divisions including marketing, product and engineering, platform and infrastructure, and software quality.
According to Layoffs.fyi, even Cisco laid off about 5,900 employees this month.