This year, due to investments in innovative technology, software companies have downsized 34,000 jobs. As of Sunday (Feb. 11), a total of 141 companies have implemented staff reductions, as reported by Layoffs. hi, a platform monitoring IT sector unemployment. Among the companies taking this step are PayPal, auction, Microsoft, and Jump.
The decision to reduce staff comes as software companies reassess their workforce, identifying areas they deem redundant. Brent Thill, an analyst at Jefferies, mentioned to the Financial Times (FT) that a more streamlined organization could lead to increased productivity.
The trend of layoffs is expected to continue, with potential for further impact. Daniel Keum, a management professor at Columbia Business School, noted that technical firms are focusing on investing in key areas while trimming costs in non-essential departments.
For example, Amazon’s Twitch streaming service recently underwent significant job cuts, reflecting this strategic shift. Keum highlighted that despite the layoffs, companies have been actively recruiting new talent alongside the workforce reductions.
Beyond the tech sector, companies like UPS and BlackRock have also announced substantial job cuts, with AI technology influencing these decisions. According to PYMNTS, many businesses prefer to emphasize the positive aspects of AI implementation rather than its role in job reductions.
UPS, for instance, clarified that AI complements rather than replaces employees, enabling marketers to generate proposals independently. While the impact of AI on job cuts is challenging to predict accurately, U.S. companies have already announced over 4,600 job reductions since May. This could be attributed to reallocating resources for hiring individuals with AI expertise or the automation of specific roles.
Despite the reported figures, it is believed that the actual number of job cuts may be higher. According to Senior Vice President Andrew Challenger from outplacement firm Challenger, Gray & Christmas, some companies opt to keep these layoffs confidential to avoid negative media attention.
