The technology sector’s employment difficulties deepened in 2024; Companies across the spectrum are announcing new layoffs, showing that the trend that started two years ago shows no signs of abating.

The wave of layoffs also affected major technology companies such as Mozilla, Sonos, Boeing, Stellantis, Samsung, Brave and GoPro. In India, companies such as Swiggy, Ola, Unacademy, Cirium, Freshworks and Reliance also reduced their workforce during the year.

Cloud storage company Dropbox is laying off approximately 20 percent of its workforce, while social media platform TikTok plans to lay off approximately 500 employees, primarily in content moderation roles that will be managed by artificial intelligence.

“This market is advancing rapidly and investors are pouring hundreds of millions of dollars into this space. “This both confirms the opportunity we are pursuing and underscores the need for greater urgency, more aggressive investment, and decisive action,” Dropbox CEO Drew Houston said in a memo to employees.

The company faces intense competition from tech giants Google, Microsoft and Box in personal and enterprise business.

Indian companies were not spared either. Chennai-based software-as-a-service company Freshworks has announced plans to lay off 660 employees from its global workforce of 5,500.

“There is no good time to make such a decision,” Freshworks CEO and president Dennis Woodside wrote in an email to employees.

The decision sparked criticism from Sridhar Vembu, CEO of Zoho Corporation, another Chennai-based technology company. “I can understand the unfortunate reality of layoffs when a business is struggling or declining and making a loss. This is not the case, this is outright greed, nothing less,” Vembu wrote in a social media post.

He noted Freshworks’ strong financials, including a $1 billion cash reserve (about 1.5 times its annual revenue), a 20 percent growth rate and the ability to fund a $400 million share buyback.

“A critical question for leadership is this: Don’t you have the vision and imagination to invest $400 million in another business where you can assign people you hired but no longer want?” Vembu questioned.

Industry experts attribute the ongoing layoffs to many factors. The growing capabilities of AI are displacing human workers, as evidenced by TikTok’s decision and IBM’s previous announcement that it will replace 8,000 workers with AI in the coming years.

“Tough economic conditions and the unstable geopolitical situation since last year have made it difficult for many businesses to access capital and grow profitably. “To remain competitive in this dynamic environment, continuous learning and skills development are crucial to adapt and evolve,” said Hari Krishnan Nair, co-founder of education technology company Great Learning.

Even profitable companies are not immune. Qualcomm, which records annual revenue of $35.8 billion for 2023, plans to lay off 226 employees in its San Diego facilities. This follows the departure of more than 1,200 employees last year.

“As part of the normal course of business, we are prioritizing and aligning our investments, resources and capabilities to ensure we are best positioned to capitalize on the unprecedented diversity opportunities ahead,” a Qualcomm spokesperson said.

Music streaming platform Tidal is completing its second round of layoffs in less than a year. Block CEO Jack Dorsey, whose company owns Tidal, told employees in October that the company should operate “like a startup again.”

Austin Russell, CEO of Luminar Tech, whose company develops autonomous driving technology, summed up the industry’s plight: “Our overhead is built around a different climate, value perspective, and cost of capital.” The company plans to reduce certain functions by 30 percent.

The US Federal Reserve’s previous inflation control measures increased businesses’ borrowing costs and debt payments, forcing them to simplify organizational structures and cut costs.

As technology and automotive companies lay off employees, they may hope that the fundamentals of their business, including technology, product and diversification plans, are on solid ground. Otherwise, 2025 may bring much more pain.