In 2024, the workforce reductions trend that started in 2023 is expected to continue. According to data collected by DemandSage, over 1.64 million Americans were laid off in 2023. As the new year begins, various industries including tech companies, banks, and businesses of all sizes are reporting record-breaking layoffs across the nation. In January alone, U.S. companies announced more than 82,300 job cuts, an increase of 136 percent compared to December.
The financial industry experienced the highest number of job losses in January, with 23,238 jobs cut. This marked the highest monthly job losses for the sector since September 2018. The tech industry followed closely behind with 15,806 layoffs, a significant increase from the previous month. In 2023, a total of 224,503 jobs were eliminated in the tech industry.
One industry facing significant layoffs is the banking industry. As online banking becomes more prevalent, traditional brick-and-mortar locations are becoming less necessary. Deloitte Financial Services predicts that the banking industry will face challenges in 2024 due to a slowing global economy and various disruptive forces such as higher interest rates, reduced money supply, regulations, climate change, and geopolitical tensions. Banks such as Bank of America, Chase Bank, and Wells Fargo have already announced branch closures and job cuts.
The tech industry is also experiencing sector-wide job cuts. US-based tech companies are expected to cut at least 18,873 jobs in 2024, with 6,471 layoffs already occurring in the first week of February. Companies like Snap Inc., Grammarly, DocuSign, and Okta have announced significant workforce reductions. The layoffs in the tech industry have been attributed to a “herding effect,” where companies believe that layoffs can positively impact their stock prices.
Interestingly, stock prices of companies like Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla have seen significant increases despite the layoffs. This phenomenon is not limited to the tech industry, as Disney’s stock has also been rising steadily after the company announced 7,000 job cuts as part of its restructuring plan.
Despite the challenging job market, some companies are reporting positive financial results. Disney recently reported better-than-expected first-quarter earnings and stated that they are on track to meet or exceed their $7.5 billion annualized savings target by the end of fiscal 2024.
In conclusion, 2024 is predicted to see ongoing significant workforce reductions across various industries. The financial and tech sectors are particularly affected, with banks closing branches and tech companies implementing sector-wide job cuts. While these layoffs may contribute to stock price increases for some companies, the job market remains challenging for many Americans. However, there are exceptions, as companies like Disney show positive financial results amidst their restructuring efforts. The year ahead poses economic challenges that will shape the workforce landscape for years to come.
