From Fortune:

2023 saw the highest total of tech job cuts since the Great Recession, with more than 720,000 layoffs. Google, Amazon, and other tech firms are slashing jobs to drive profitability and reduce costs. The pandemic hiring boom resulted in over-hiring, now leading to layoffs as companies realize they didn’t cut enough employees in the first round.

Google, Amazon, and other tech giants are reducing their workforce in an effort to invest more in areas like AI and cut costs in high-cost, lower-profit areas. Other tech firms like Amazon have announced staff cuts from media divisions, including Prime Video, Twitch, and Audible. Layoffs are also due to over-hiring during the pandemic and a renewed focus on profitability.

The “wild hiring spree” of 2021 and 2022 is deflating, leading big tech companies to realize they over-hired and to continue trimming their workforce. They are also predicting slower growth ahead and are working on conservative growth predictions for the future, leading to ongoing layoffs even in the upcoming months.

tech industry layoffs are driven in part by rapid AI development, which is leading companies to downsize non-AI areas to keep businesses profitable. Falling inflation has also contributed to job cuts, making it harder for companies to increase prices while also paying for increased labor costs. This period is still favorable for tech workers, with unemployment below 4% and high likelihood of finding new work quickly.

Layoffs in January are due to corporate budget calendars, with many firms making structural changes heading into the new year. Companies are taking a hard look at their balance sheets and business performance. Meanwhile, media industries have cut over 21,400 jobs, after a boom in job cuts over the last year, with more cuts expected to continue into the new year.



Read more: 4 worrying trends in tech that are fueling Google and Amazon layoffs