Tech layoffs are expected to continue as companies seek to hire more AI talent, analyst says

Aaron Mok
·2 min read
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  • Over 20,000 employees across the tech industry were laid off in January 2024.

  • And more Big Tech layoffs may be coming this year as companies bet big on AI, an analyst told CNBC.

  • Google and Amazon have already made hundreds redundant this month as they shift their focus to AI.

Thanks to a fresh wave of mass layoffs, it's been a brutal start of the year for tech workers, and employees may not be out of the woods.

As of January 2024, 89 tech companies have laid off almost 25,000 employees, according to tracker site Layoffs.fyi. And one analyst also said there will be more redundancies across the industry this year, primarily as they pivot their focus to spending on the AI sector.

"Google and the rest of Big Tech are betting big on AI while cutting back on non-strategic areas," Dan Ives, a tech analyst at Wedbush Securities, told CNBC. Layoffs will continue in some areas, while"the hiring frenzy in AI will be unprecedented as this arms race continues across the tech world."

Ives didn't immediately respond to a request for comment from Business Insider before publication.

Earlier this month, Google slashed hundreds of roles focused on Google Assistant and its fitness tracker Fitbit, yet has released a slate of AI products like its new Google Chrome features. Following the company's latest round of layoffs, Google CEO Sundar Pichai announced in a staff memo that more roles will be eliminated this year to "drive velocity in some areas."

Around the same time as Google's layoffs, Amazon said it's cutting "several hundred" employees across Prime Video and Amazon MGM Studios. The e-commerce giant has also been doubling down on its AI investments.

Earlier this week, SAP said it would offer buyouts or different positions to 8,000 workers as part of its $2.2 billion "transformation program" to turn its attention to AI to cut costs and boost profits.

But while growing investment in AI may soon put more out of work, new roles are being created within the AI space. Companies like Apple, Meta, and Nvidia are actively looking to fill AI-focused roles related to machine learning and natural language processing for salaries well over six figures, according to job listings, in an attempt to court the best generative AI talent.

In other words, working in AI may be what saves you from losing your job to AI.

Read the original article on Business Insider