Vantage | Will 2024 be a year of layoffs too?

The year 2023 was all about layoffs. Thousands lost their jobs—around 250,000 people globally—but 2024 is proving to be no different. The year began with another series of layoffs that weren’t as bad as last year, but companies are still cutting jobs.

Cisco is laying off 4,250 people—around 5 percent of its global workforce. The company says it is part of a restructuring plan. It was to realign its structure and invest in other key priority areas. This is despite the fact that Cisco was not running at a loss. The company posted solid second-quarter earnings, which were around $12.8 billion in revenue.

Cisco has given two reasons for restructuring—weak demand and a tough economy—and they aren’t the only ones. Nike cut around 1,700 jobs. It is about 2 percent of its workforce. The sports giant wants to cut costs by around $2 billion in the next three years. The company will now focus on three major categories—running, women’s apparel, and its Jordan brand. Most resources will be directed towards that.  Similarly, Paramount is also laying off 800 people—around 2 percent of its workforce. This is to boost its transition from television to streaming.

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Snapchat has cut around 500 jobs, which is about 10 percent of the workforce. The company says its goal is to reduce hierarchy. Grammarly has laid off 230 people. The company says it wants to focus on an AI-led future. Instacart is laying off around 250 employees. Mozilla is cutting 5 percent of its jobs. Paypal has started company-wide layoffs. Spicejet will lay off 1,400 people. Swiggy is cutting 400 jobs. Vroom is laying off 90 percent of its workforce. Pixar is cutting more jobs. The list is long.

This is the second month of this year, and 25,000 jobs have already been cut. More companies are expected to follow suit, which brings us to the question: Why are layoffs not slowing down? Mark Zuckerberg has a theory. The Meta CEO was asked about this, and he says companies realise it is beneficial to be lean. Of course, Zuckerberg is talking about the tech sector, but it is an answer that holds true for all.

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When the pandemic struck, many companies grew too fast, especially tech companies. Soon, the world opened up, and people returned to normalcy. The economy adjusted, and demand went back to normal. But companies were still too big. So, right now, this is a correction. Organisations grew too big and too fast. Now, they are cutting jobs to save costs. It is being touted as efficient; at least, that is what Zuckerberg says.

So will this trend continue throughout the year? The global economy is slowing down. Growth is sluggish. Some major economies are in recession. Others are bracing for it. Inflation is driving up prices. So as customers are watching their wallets, so are companies.

But chasing profits is only one side of the story, and the other side is artificial intelligence. Jobs are being automated. So humans are becoming redundant. This sounds alarming, but it is not all bad.

A lot of people may lose their jobs to AI, but it is also creating new roles. Especially in the tech space. Take NVIDIA, Microsoft, and Meta for example. They are all looking to hire people, but only in more AI-focused roles.

So, while last year was about mass layoffs, this one seems to be about cost-cutting. You could say it means the same thing—more pink slips—and you won’t be wrong.

Views expressed in the above piece are personal and solely those of the writer. They do not necessarily reflect Firstpost’s views.