The reason behind massive layoffs in the tech sector in 2024
In This Article:
Tencent's Riot Games (TCEHY, 0700.HK) announced it will lay off 11% of its staff, about 530 employees. The company joins a list of tech companies that have announced layoffs, bringing the total number to just short of 11,000 in 2024, according to Layoffs.fyi.
Layoffs.fyi Creator Roger Lee joins Yahoo Finance to give insight into the recent round of layoffs in the tech sector and what it could mean for the broader labor market.
"A lot of the recent layoffs are still about tech companies trying to overcorrect for their overhiring during the pandemic," Lee says. "Given that the high interest rate environment and the tech downturn have both lasted longer than initially expected, companies like Amazon (AMZN) and Google (GOOG, GOOGL) are finding that maybe they didn't cut enough people in last year's large rounds of layoffs so they're going back to the well and continuing to implement smaller, targeted additional layoffs."
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
[AUDIO LOGO]
RACHELLE AKUFFO: Tencent's Riot Games is the latest tech company to announce layoffs. The gaming company saying it will cut 11% of its staff or about 530 jobs as it scales back the division that publishes games from small developers. Now, this move is bringing the total number of employees laid off in 2024 to nearly 11,000, that's according to layoffs.fyi. Joining us now is Roger Lee, the creator of layoffs.fyi. So Roger, give us a sense of this because where are we comparatively to 2019 in terms of the hiring and laying-off cycle?
ROGER LEE: So it's been a bad recent few months for tech layoffs. Already this year, we're over 10,000 tech employees cut. And that follows a brutal 2023 where over 260,000 employees got cut in the tech sector, which is the largest year since COVID began in 2020.
AKIKO FUJITA: Roger, though how much of this is about a correction that we're seeing within these companies? I mean, when you think about the big tech names that have announced layoffs, so much of that has been followed by the fact that they overhired at the height of the pandemic. How much of what we've seen--
ROGER LEE: Yeah.
AKIKO FUJITA: --so far this year can be attributed to that? How much of it is about a broader slowdown that some of these companies are seeing?
ROGER LEE: So a lot of the recent layoffs are still about tech companies trying to overcorrect for their overall hiring during the pandemic. Given that the high-interest rate environment and the tech downturn have both lasted longer than initially expected, companies like Amazon and Google are finding that maybe they didn't cut enough people in last year's large rounds of layoffs. So they're going back to the well and continuing to implement smaller, targeted additional layoffs.