Last Updated on December 26, 2023 by Robert C. Hoopes
Title: Generative AI Prompts Tech Companies to Lay Off Thousands of Employees Worldwide
Subtitle: Startups and Big Tech firms cite global macroeconomic conditions as reasons for job cuts
In a concerning trend, the rise of generative artificial intelligence (AI) is increasingly posing a threat to millions of jobs worldwide, leading tech companies to make tough decisions and lay off employees. Although many companies had spared workers during the holiday seasons in 2021 and 2022, the new year has brought about job cuts, affecting thousands of employees.
Over the past two years, tech companies globally have terminated the employment of over 425,000 workers, with India alone witnessing a staggering 36,000 job cuts. Big Tech firms and startups alike are citing global macroeconomic conditions as the reason for these layoffs, highlighting the challenges and uncertainties of the current business landscape.
Recent data from layoff.fyi reveals that as of 2023, a total of 1,178 tech companies have laid off a massive 260,771 employees. The year 2022 saw 1,061 tech companies eliminating the positions of 164,769 employees. This means that, on average, approximately 582 employees have lost their jobs every day over the past two years, equating to more than 24 workers every hour.
Among the sectors most affected by these job cuts are retail-tech, consumer-tech, and fintech. Leading companies such as Paytm, ShareChat, Loco, Adda247, Byju’s, and Dunzo have all resorted to significant layoffs to navigate the turbulent economic conditions.
Paytm, for instance, has laid off over 1,000 employees, while ShareChat had to ask 200 employees to leave. Loco, facing economic challenges, has parted ways with 36% of its workforce. Likewise, Adda247 has let go of approximately 250-300 employees, and Byju’s conducted a restructuring exercise, resulting in 4,000-5,000 job cuts.
Dunzo, which had already cut nearly 400 positions earlier in the year, reportedly laid off an additional 150-200 employees due to a severe cash crunch in September. These job losses signify the financial struggle that companies in the tech industry are facing due to the impact of the pandemic.
The increasing prominence of generative AI technology is making certain job functions redundant, pushing companies to reevaluate their operations. While the benefits of AI are undeniable, finding ways to minimize job displacements and support affected workers remains a pressing challenge for the industry.
As the tech sector strives to navigate the demands of the rapidly evolving business landscape, the fate of many employees worldwide hangs in the balance. Efforts must be made to retrain and transition affected workers, while also exploring new avenues for job creation to ensure a sustainable and inclusive future for all.