Major Layoffs to Continue in 2024

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Continuing the trend from 2023, more major layoffs are coming in 2024.

Data collected by DemandSage shows that over 1,64 million Americans were laid off in 2023.

To ring in the new year, tech companies, banks, as well as big and small businesses are reporting record-breaking layoffs nationwide, more than doubling in January over December, with more slated over the coming months.

A new analysis, published Feb. 1 by executive coaching firm Challenger, Gray & Christmas, U.S. companies announced more than 82,300 job cuts in January, an increase of 136 percent over December.

“With the exception of last January’s total, this is the highest number of job cuts announced in the first month of a new year since January 2009, when 241,749 cuts were announced at the start of that year,” the report stated.

Leading in January’s job cuts were companies in the financial industry, announcing 23,238 jobs lost. This marked the highest monthly job losses for the sector since September 2018, when 27,343 jobs were cut.

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The Tech industry placed second, with 15,806 layoffs, up 254 percent from the 4,470 jobs the sector lost the previous month. It was the biggest loss of jobs in the tech industry since May 2023, when 22,887 jobs evaporated.

This is on top of the 224,503 total jobs eliminated in the tech industry last year.

The Banking Industry

As online banking replaces the need for brick-and-mortar locations, U.S. banks are posting massive layoffs, with 139 closings announced in January alone. More are scheduled.

Deloitte Financial Services says, “A slowing global economy, coupled with a divergent economic landscape, will challenge the banking industry in 2024,” and the ability of banks to “generate income and manage costs will be tested in new ways.”

Listed among the challenges “reshaping the foundational architecture of the banking and capital markets industry” are “higher interest rates, reduced money supply, more assertive regulations, climate change, and geopolitical tensions.”

Among the banks being reshaped by those “disruptive forces,” Bank of America is closing 62 branches this year, 20 of which are in California.
Chase Bank will be closing 23 branches. Wells Fargo, which closed 60 branches between October 2023 and January 2024, will shutter another 50 locations in the coming months.

As part of its multiyear restructuring plan, Citigroup will eliminate 20,000 jobs by the end of 2026.

The only suggestion offered by The Financial Brand as to what might ease the “record-breaking pace of bank branch closures” in 2024 is that many banks have “hit their practical limit.”

The first is that banks will continue to fail, “leading to a tightening of credit availability for households and businesses.”

The second possibility is that the banking crisis briefly subsides, but inflation will remain high, prompting the Federal Reserve to hike interest rates drastically.

If the Federal Reserve continues to raise interest rates to mitigate continuing inflation, the banking industry “could see more losses on security holdings, prompting additional bank failures and runs.” Drastic interest rate hikes will result in “a significant devaluation of bank holdings of Treasury and mortgage-backed securities, leading to insolvency and failure of several banks.”

The Tech Industry

The tech industry is also beginning the new year with the same strategy it ended with in 2023: sector-wide job cuts.

According to the Crunchbase Tech Layoffs Tracker, US-based tech companies will be cutting at least 18,873 jobs in 2024, with 6,471 of those layoffs coming in the week ending Feb. 5. These losses are on top of the 191,000 layoffs in 2023.
Snap, Inc., the parent company of Snapchat, is laying off 10 percent of its workforce, a move that will cost an estimated 500 jobs.
Data collected by Layoffs.fyi, a startup that has been tracking tech industry layoffs since the COVID-19 pandemic shows that 141 companies have already eliminated over 33,000 jobs so far in 2024.

On Feb. 7, Grammarly, a company that provides a digital writing assistance program, cut 230 jobs.

On Feb. 6, DocuSign, the pioneer of e-signature technology, announced a “restructuring plan“ that will eliminate six percent of its workforce, which Layoffs.fyi estimated to be around 440 employees.

Precisely one year after it announced plans to lay off 300 of its employees (about five percent), Okta, an online identity management software company, said it’s cutting another 400 employees, around seven percent of its workforce.

In response to the wave of layoffs in the tech industry, Jeff Shulman—a professor at the University of Washington’s Foster School of Business who follows the tech industry—said, “There is a herding effect in tech. The layoffs seem to be helping their stock prices, so these companies see no reason to stop.”

On Jan. 22, The New York Times reported that seven stocks—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—had “collectively risen nearly 117 percent, far outpacing the performance of the other 493 companies in the S&P 500.”

Five of the companies known now as “the Magnificent Seven” are tech companies.

Huge stock gains after massive layoffs are not confined to the tech industry.

Following Disney’s axing of 7,000 jobs last year, part of its multi-billion restructuring plan to streamline and cut costs, the company’s stock is seeing a steep and steady rise. On Feb. 7, the family entertainment giant also reported better-than-expected first-quarter earnings, saying the “results reflect the progress” they’ve made through their “strategic transformation,” and they are “on track to meet or exceed their ”$7.5 billion annualized savings target by the end of fiscal 2024.”

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