Layoffs continue in the tech sector into the second half of 2024, with companies like IBM, Cisco, Microsoft, and Qualcomm cutting jobs to manage costs amid economic challenges.
Layoffs in the tech sector have persisted into the second half of 2024, with numerous high-profile companies implementing job cuts as part of their restructuring efforts. One of the notable companies affected is IBM, which recently began a second round of layoffs. This round primarily targets senior programmers, sales staff, and support personnel as part of its "workforce rebalancing" strategy. IBM aims to reduce a small percentage of its global workforce but has stated that it expects to maintain approximately the same number of employees by the end of the year as it had at the beginning.
These layoffs are indicative of broader trends affecting the technology industry, where both large and small companies are struggling to maintain profitability in a challenging economic landscape. Healthtech startup Dozee, which has operations across India, recently laid off around 40 employees to manage its losses. Similarly, WeTransfer, which was recently acquired by Bending Spoons, made drastic cuts by reducing its workforce by 75% as part of a profitability strategy. These changes highlight the difficulties companies face in sustaining operations amid economic uncertainties.
Cisco, a major player in the tech industry, announced another round of layoffs in August 2024, which will affect approximately 5,600 employees, translating to a 7% workforce reduction. This announcement follows an earlier layoff round in February, which resulted in 4,000 job losses. Employees, particularly those from Cisco's Talos Security division, expressed frustration over the delayed notification about the layoffs. Some described the work environment as "toxic" during this uncertain time. Cisco defended its decision, explaining that these layoffs are crucial for investing in growth opportunities and maintaining competitiveness in a rapidly evolving tech landscape.
Microsoft has also joined the ranks of companies making layoffs, with its Xbox division cutting 650 employees, mainly from corporate and support roles. This decision aligns with Microsoft's efforts to restructure the team after acquiring Activision Blizzard. Despite these layoffs, Microsoft reassured the public that no games or studio closures would result from the cuts, emphasizing its ongoing commitment to growing its gaming portfolio.
Other significant tech companies, including Qualcomm and Dell, have also announced layoffs. Qualcomm is laying off 226 employees in San Diego, following a previous reduction of over 1,250 workers. This move is part of Qualcomm's strategy to navigate ongoing financial challenges. Meanwhile, Dell Technologies has indicated it will continue reducing its workforce in 2024, focusing on managing costs amid slow recovery in PC demand. The company is also looking to expand its AI server business, aiming to capture the growing demand in the artificial intelligence sector, although profitability remains a challenge due to high chip costs.
In a contrasting trend, the IT services sector is projected to see a significant rebound in fresh hiring during the fiscal year 2025. Experts estimate that entry-level hires will nearly double, reaching over 150,000 new positions compared to the previous year. This anticipated increase follows a period of low hiring, with FY24 recording the lowest intake since 2000. The positive outlook is attributed to strong deal wins, global expansion by Indian IT companies, and rising demand in sectors like banking and financial services. Aditya Narayan Mishra, MD & CEO of staffing firm CIEL HR, noted that fresher hiring demand is expected to rise by 10-15% in the second half of FY25 compared to the same period last year.
Overall, while layoffs have dominated headlines in the tech industry, the projected increase in fresh hiring in the IT services sector indicates a potential rebound. The ability of the industry to adapt and respond to changing economic conditions remains a testament to its resilience.
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