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Microsoft said today it is laying off 1,900 employees. It joins dozens of other tech companies, including Google, Amazon, TikTok and Meta, in slashing tech jobs. It's the latest sign that Silicon Valley is still trying to adjust from the boom times of the pandemic. NPR's Bobby Allyn reports.
BOBBY ALLYN, BYLINE: It's been a punishing year for the tech industry, and we're only four weeks in.
ROGER LEE: So far, in 2024, over 75 tech companies have laid off over 21,000 employees.
ALLYN: That's Roger Lee. He's a San Francisco-based tech worker who runs Layoffs.fyi, which tracks layoffs in the tech sector. The tech industry has been shedding jobs for years now. Last year marked one of the worst in recent memory, with some 260,000 techies losing their jobs. This year isn't expected to be anywhere near that total, but the layoffs haven't stopped. The way executives are defending the continuation of job cuts may sound familiar. And no, it's not AI.
LEE: The biggest driver of the recent tech layoffs we've been seeing is still companies trying to correct for their overhiring during the pandemic surge given that the high-interest-rate environment and tech downturn have both lasted longer than initially expected.
ALLYN: Lee estimates that just about 20% of the job losses in tech have been explained away by artificial intelligence, with tech companies trimming and reshuffling staff and investing more in automation. The big focus is on generative AI, which is the next gold rush in Silicon Valley. And while the economy is improving, sticky inflation and still historically high interest rates are dampening the outlook.
But do tech companies have to lay off workers or do they want to? Lee says for some small tech startups that are running out of money, yeah, they might be forced to. But big tech companies, no. They are very profitable and have been driving the stock market higher, and those profits would be strong with or without this latest round of layoffs.
LEE: You're seeing that these tech companies are almost being rewarded by Wall Street for their cost discipline, and that might be encouraging those companies and other companies in tech to cut costs and lay off staff.
ALLYN: In other words, there is something contagious about tech layoffs. And if sacking tech workers lowers expenses and improves profit margins even slightly, investors looking to make money from the tech world are sure to be happy.
Bobby Allyn, NPR News.
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