Layoffs across the U.S. have hit their highest level for the month since the Great Recession.
The tech and finance industries have experienced the greatest cuts, with tens of thousands of people losing their jobs in these sectors in 2024.
U.S Employers Cut Tens of Thousands of Jobs
According to a report published by Challenger, Gray, and Christmas, around 84,638 people were laid off from their employers in February.
This sees an increase of 3% from the previous month and a staggering 9% increase from February 2023.
Highest Layoffs Since the Great Recession
The predicted layoffs in February are the highest since the Great Recession in 2009, when over 428,000 people lost their jobs.
Already in 2024, companies across the States have announced their plans to cut 166,945 jobs.
America Experiences a Persistent Wave of Layoffs
Speaking on the situation, Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc., shared his thoughts on the high number of layoffs predicted for 2024.
“As we navigate the start of 2024, we’re witnessing a persistent wave of layoffs,” he said.
Companies Opting for Technological Innovations
Challenger continued by suggesting companies are embracing technological innovations, which may help them cut labor costs.
“Businesses are aggressively slashing costs and embracing technological innovations, actions that are significantly reshaping staffing needs,” he said.
The Tech Industry Is Experiencing the Most Cuts
Tech companies have led the way in layoffs this year, with an estimated 28,218 announced. Over 12,000 layoffs occurred in February alone.
Yet, this number has dropped 55% from the same January to February period of last year, which saw over 63,000 layoffs.
Google’s Plan to Reshuffle
Layoffs at tech companies come amidst restructuring plans such as those mentioned by Google.
According to the tech giant, their January cuts are part of a reshuffle that aims to “[invest] in [their] company’s biggest priorities.”
Financial Sector Experiences Large Cuts
Financial firms have also been forced to make extensive cuts, with over 26,856 people losing their jobs in the first two months of the year.
This marks a 56% increase from the 17,235 cuts that were announced in January and February last year.
Other Sectors Experience Significant Cuts
In addition to the tech and finance sectors, several other industries have experienced heavy layoffs.
The industrial goods manufacturing sector has experienced over 7,800 playoffs so far in 2024. In comparison, energy companies have seen the loss of 4,486 jobs.
Why Are So Many Layoffs Occurring in the U.S.?
According to Challenger’s report, the primary reason for 2024’s layoffs is “restructuring,” which resulted in the loss of nearly 38,000 jobs.
Whereas, over 26,000 were lost due to unit, store, or plant closures.
AI Behind the Loss of Thousands of Jobs
The report suggests AI is also a primary reason behind the significant number of layoffs.
“In truth, companies are also implementing robotics and automation in addition to AI. It’s worth noting that last year alone, AI was directly cited in 4,247 job reductions, suggesting a growing impact on companies’ workforces,” they wrote.
Hiring Plans Remain Low
According to Challenger, reports suggest employers have hired around 15,693 people since the beginning of 2024, the lowest number since 2009.
With such a discrepancy between layoffs and new jobs in the first few months of 2024, experts have begun to suggest it may be a poor year for the job market.
