Tech layoffs surge: The significant employment cuts that Intel and Cisco announced are the reason for the sharp increase in layoffs in August.
Thousands of professionals have lost their jobs in August, and the wave of layoffs appears to be continuing unabated. The amount of layoffs this month was the biggest since January, when 122 companies cut off 34,107 workers. A total of 44 businesses let go of 27,065 employees in August.
August saw a notable increase in layoffs, with 39 organizations reporting 9,051 personnel terminations in July.fyi, a real-time tracking portal for layoffs. The notable increase can be attributed to the substantial layoffs that Cisco and Intel disclosed. Up to 15,000 Intel employees were let go, while 5,900 Cisco employees lost their employment. After Intel and Cisco, Infineon eliminated 1,400 jobs, IBM cut 1,000, and Skip The Dishes, an online meal delivery service, cut 800. This is a detailed look at what transpired in August.
Intel is making thousands of worker reductions.
Intel CEO Pat Gelsinger wrote a letter to staff on August 1 following the release of the company’s 2024 second-quarter earnings. According to Gelsinger, the business would be announcing major cost-cutting initiatives. “We want to save $10 billion in costs by 2025, and part of that involves cutting about 15,000 jobs, or 15% of our current workforce, from our headcount. The memo stated, “Most of these actions will be finished by the end of this year.”
The CEO wrote in his note that it was tough to read and even more sad to communicate the news. He described it as a “very difficult day” for Intel since they were having to make some of the most important choices in the history of the business. “Our margins are too thin and our costs are too high.” We must take more decisive action to solve both, especially in light of our financial performance and the challenging forecast we have for the second half of 2024,” the author said.
In addition, Gelsinger listed the main areas of concentration for turning Intel into a “leaner, simpler, and more agile” business. Reducing operational expenses, streamlining the portfolio, getting rid of complexity, cutting capital and other expenses, pausing the dividend, and keeping growth investments are the top priorities in this strategy.
The second wave of layoffs at Cisco this year
In its second round of layoffs this year, Cisco Systems reportedly intended to let go of roughly 7% of its workforce, according to a story published on August 14. The corporation has been focusing its attention on faster-growing tech sectors like cybersecurity and artificial intelligence (AI) at the same time as the layoffs.
The California-based corporation employed 84,900 people as of July 2023; however, it did not disclose the exact amount of layoffs. This would essentially imply that 5,900 employees will be impacted by the most recent round, based on the proportion disclosed. This year in February, the corporation laid off up to 4,000 workers.
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IBM, Infineon, and other
German semiconductor manufacturer Infineon declared on August 5 that it would be laying off 1,400 employees worldwide and moving another 1,400 to countries with cheaper labor costs. The company announced that several hundred employment at its German operation would be affected by the new job losses. For the April–June quarter, the corporation recorded $4 billion in revenue. The company’s previously disclosed Step Up cost-saving initiative includes the job cutbacks.
However, IBM announced that it was shutting down its R&D facility in China, which probably meant the loss of over a thousand jobs. The US IT giant has been having trouble with issues in China’s growing markets as well as a decline in the demand for its devices. The business insisted that these modifications will not affect its capacity to assist customers throughout the Greater China area.
Nearly eight hundred workers were let go by the parent business of the Canadian online meal delivery service SkipTheDishes. “We are downsizing our workers and reorganizing our company. Paul Burns, CEO of SkipTheDishes, stated on LinkedIn that “this move affects approximately 100 Canadian market employees, along with 700 operations employees servicing the global Just Eat Takeaway.com organization based out of Canada.” According to Burns, the choice was essential for sustainability.
Why are there more layoffs?
The relentless drive among businesses to cut expenses in order to meet the current difficult financial conditions appears to be the main cause of these layoffs. The significant 15,000 job layoff by Intel highlights the need for cost-cutting measures. Declining profits and a dismal financial forecast for the second half of 2024 are the main drivers of this. Comparably, the significant layoffs at Cisco demonstrate the strategic realignment toward high-growth fields like cybersecurity and artificial intelligence that necessitates resource reallocation.
The effect of the uncertainty surrounding the world economy, which is having an influence on demand as well as revenue, is another significant trend we have been observing. For instance, Infineon’s layoffs and office moves reflect a larger initiative to lower running expenses as demand declines. However, IBM’s layoffs in China underscore the difficulties these businesses face in continuing to turn a profit in expanding regions. Additionally, businesses like Skip The Dishes are reorganizing in order to maintain long-term viability, even if doing so results in a significant loss of jobs.
Essentially, the dramatic increase in layoffs is a result of a confluence of cost-cutting measures, strategic decisions, and wider economic difficulties that the tech sector is currently confronting. It appears that many businesses are putting their future expansion and financial stability ahead of their employees.
While the current wave of layoffs is difficult to deal with, it’s crucial to remember that the tech sector is always changing. The shift will present new opportunities, and as businesses turn more and more to cybersecurity, artificial intelligence, and other fields, there is an increasing need for qualified personnel in these fields.
For individuals impacted by the wave, this may present a chance to retrain or upskill in order to better align themselves with the demands of the IT sector going forward. We advise making the investment to expand one’s knowledge in in-demand fields, acquire new talents, and utilize online resources. In this manner, one may ensure that they are progressing uniformly.
