From Microsoft to IBM: Tech layoffs cross 1 lakh mark as companies brace for more cuts ahead

Layoffs across the tech sector continued into the second half of 2024, with several high-profile companies slashing jobs as part of their restructuring efforts. IBM, for instance, began a second round of layoffs, primarily targeting senior programmers, sales, and support staff as part of its ongoing “workforce rebalancing” strategy. The company aims to reduce a low single-digit percentage of its global workforce but expects to finish the year with roughly the same number of employees it had at the beginning.

These cuts are reflective of broader trends in the tech industry, which has seen several large and small companies implement workforce reductions throughout the year. Healthtech startup Dozee, despite its presence across India, laid off about 40 employees to cut losses, while WeTransfer, recently acquired by Bending Spoons, saw 75% of its workforce cut as part of a profitability strategy. These layoffs underscore the difficulties companies face in maintaining profitability in a challenging economic environment.

Cisco Announces Another Round of Layoffs

Cisco continued its layoff streak in 2024, announcing a 7% workforce reduction in August, which affects approximately 5,600 employees. This followed an earlier round of layoffs in February that saw 4,000 employees lose their jobs. The impacted employees, including those from Cisco’s Talos Security division, which focuses on threat intelligence and security research, were only notified of the layoffs on September 16. Employees expressed frustration over the delayed notification, with one affected staff member describing a “toxic work environment” during this uncertain period.

Cisco defended the layoffs, citing the need to “facilitate investments in growth opportunities and efficiency.” The company explained that these workforce reductions were essential for maintaining competitiveness in the rapidly evolving tech landscape.

Microsoft’s Xbox Division Reduces Workforce

Microsoft joined the list of companies laying off workers, announcing that 650 employees from its Xbox gaming division were being let go. The job cuts primarily affected corporate and support roles and were part of an effort to align the team structure after Microsoft’s acquisition of Activision Blizzard. The move followed a prior round of layoffs earlier in the year, where 1,900 employees were affected.

Despite these cuts, Microsoft reassured that there were no game cancellations or studio closures associated with the layoffs. While Xbox console sales have declined, gaming revenue remains robust due to the successful acquisition, highlighting the strategic focus of the company on growing its gaming portfolio.

Qualcomm, Dell, and Others Continue Job Cuts

The wave of layoffs extended to other major tech companies as well. Qualcomm, the well-known smartphone chipmaker, announced that it would lay off 226 employees in San Diego later in 2024. This decision comes less than a year after the company had already let go of over 1,250 workers. The layoffs are part of Qualcomm’s broader strategy to cope with ongoing financial challenges.Similarly, Dell Technologies announced that it plans to continue reducing its workforce into 2024, with a specific focus on managing costs amid a slow recovery in PC demand. The company is also focusing on expanding its AI server business to capture the growing demand in the artificial intelligence sector, though profitability challenges remain due to the high cost of computer chips.

Udemy, an online learning platform, also made headlines as it prepared to cut 50% of its workforce. However, the company plans to rehire in lower-cost regions as part of its restructuring strategy.

Fresher Hiring Expected to Surge in IT Services Sector

While layoffs dominated much of the news in 2024, the IT services sector is expected to see a significant rebound in fresher hiring during FY25. Industry projections indicate that entry-level hires will nearly double, reaching over 150,000 new positions compared to the previous fiscal year. This sharp increase follows a period of low hiring in FY24, the lowest intake since 2000, when the sector recorded around 60,000 net hires.

Experts attribute this rebound to strong deal wins, global expansion by Indian IT majors, and increasing demand in sectors like banking, financial services, and insurance (BFSI). “Fresher hiring demand is projected to rise by 10-15% in the second half of FY25 compared to the same period last year. This growth is primarily driven by a reduction in bench strength and an optimistic industry outlook for the coming months,” said Aditya Narayan Mishra, MD & CEO of staffing firm CIEL HR.

This optimism reflects the industry’s ability to bounce back despite current restructuring efforts.

Global Economic Challenges Lead to Widespread Layoffs

The wave of layoffs is not limited to the tech industry. Several global corporations have also made significant workforce cuts as they navigate economic challenges. Samsung is reportedly considering reducing its workforce by up to 30% in some divisions, with roles in sales, marketing, and administration potentially impacted. PwC’s US division, meanwhile, laid off around 1,800 employees, marking its first major workforce reduction since 2009.

Other companies, such as Disney and Paramount Global, have also implemented job cuts as part of cost-saving measures. Paramount’s second round of layoffs affected multiple divisions, including CBS, Comedy Central, and MTV, while Disney’s corporate restructuring led to layoffs in several divisions.

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