Tech jobs face grim outlook as global layoffs mount amid economic pressure

Joy Agwunobi

The turbulent job cuts in the tech sector are showing no signs of abating as the year 2024 marches on, continuing the wave of layoffs that have become an unwelcome fixture in the industry over the past few years.

2023 saw  260,000 tech workers lose their jobs worldwide, representing a steep rise from the 167,600 job cuts recorded in 2022. As the industry struggles with economic uncertainties and businesses undertake significant cost-cutting measures, the tech workforce faces a grueling landscape where layoffs are the harsh reality.

Recent data published by BestBrokers in August 2024 reveals the depth of the tech sector’s job loss crisis. The report, which draws from layoff announcements tracked by trueup.io, indicates that 203,946 employees have been laid off across 165 tech companies worldwide.

The wave of tech layoffs sweeping across the globe in 2024 has taken a devastating toll on numerous countries, but none more so than the United States, which has borne the brunt of the crisis. The report reveals that the U.S. tech sector has been hit with a staggering 115,257 job cuts, representing more than half of the total layoffs recorded worldwide.

China has also felt the impact, with 12,900 tech employees losing their jobs, placing the country in second position on the list of countries with the highest number of tech layoffs

The tech job loss crisis has left no corner of the globe untouched, as evidenced by the data in the report. Japan, India, Turkey, Spain, and the United Kingdom are among the nations experiencing significant tech layoffs, indicating the far-reaching consequences of the current economic turmoil.

With 12,240, 8,560, 6,000, 3,471, and 3,350 tech employees losing their jobs in Japan, India, Turkey, Spain, and the UK, respectively, the report underscores the widespread nature of this global crisis.

While the brunt of the global tech layoffs in 2024 has been felt by the larger countries, smaller nations have not been immune to the industry’s downturn.

Israel, Sweden, and France have each recorded significant tech layoffs, with 1,816, 1,690, and 1,661 employees losing their jobs, respectively. In Kenya and Pakistan, where the tech industry is relatively smaller, the job loss toll has been notable, with 1,060 and 400 layoffs respectively.

The report also highlighted companies most affected by the tech job loss crisis in 2024. Dell topped the list, laying off 18,500 employees, followed closely by Intel and Tesla, with 15,000 and 14,000 job cuts, respectively. Chinese carmaker Li Auto and German software giant SAP were also hard-hit, laying off 10,000 and 9,500 employees. Even companies such as Japan’s NTT Data and Cisco saw significant layoffs, with 9,000 and 8,000 job cuts, respectively.

The global tech sector’s downturn is not just a distant concern for major economies. Reports show that it has reached the shores of Africa, casting a shadow over Nigeria’s once-celebrated tech scene.

Nigeria, known for its vibrant innovation and rapid growth, is also struggling with the shift in excitement of the past replaced by a challenging reality marked by business closures, job losses, and financial instability.

As global tech giants face economic pressures, Nigerian tech startups are feeling the pinch of the current economic strain. Faced with similar financial pressures, many of these local tech firms are having to make tough decisions, including laying off employees, in a bid to keep  business running.

The sector, which had been buoyed by billions in venture capital funding and the rise of successful companies like Paystack and Flutterwave, is now struggling with reduced investment.

According to reports, In 2023, Nigerian startups raised $398.2 million, a 66 per cent decline from the previous year.

The decrease in funding has had a severe impact on the sector. Many startups are now forced to make difficult decisions, including layoffs, in an effort to remain operational. The once-booming tech industry, which experienced rapid growth between 2020 and 2022, is now facing a harsh downturn.

In February 2024, Spleet, a property tech startup, laid off an undisclosed number of employees due to inflationary pressures. This move has intensified the competition in an already tight job market.

Similarly, Flutterwave, a major player in African payments, laid off about 30 employees, roughly three percent  of its workforce, in June 2024. This decision came after the company shifted its focus to remittances and enterprise services, which resulted in its  staff reductions.

Faced with a crushing economic downturn, Nigeria’s tech sector is buckling under the weight of reduced revenues and investor confidence, resulting in job losses and pay cuts that have left tech professionals reeling.

Amidst the turmoil, tech workers across the country find themselves in an increasingly precarious position, struggling to make ends meet amidst job insecurity, unpaid or delayed salaries, and heavier workloads.

With Nigeria’s unemployment rate projected to soar beyond 40 percent, the tech job market is seen to be shrinking, leaving laid-off workers with few options for finding new employment.