Major Layoffs to Continue in 2024

Microsoft logo is seen through broken glass in an illustration taken on Jan. 25, 2023. Dado Ruvic/Illustration/Reuters

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

Data collected by DemandSage show that more than 1.64 million Americans were laid off in 2023.

To ring in the new year, tech companies and banks, as well as big and small businesses, are reporting record-breaking layoffs nationwide, more than doubling in January over December 2023, with more slated over the coming months.

According to a new analysis, published on Feb. 1 by executive coaching firm Challenger, Gray & Christmas, U.S. companies announced more than 82,300 job cuts in January, a 136 percent increase over December 2023.

“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 reads.

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.

The tech industry placed second, with 15,806 layoffs, up by 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.

“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,” Deloitte Financial Services stated.

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,” Deloitte stated.

Among the banks being reshaped by those “disruptive forces,” Bank of America is closing 62 branches—20 of which are in California—this year.

Wells Fargo, which closed 60 branches between October 2023 and January, 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.”

GoBankingRates predicts two possible scenarios for the banking industry in 2024:

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 Fed 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,” GoBankingRates predicted.

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,” it predicted.

The Tech Industry

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

According to the Crunchbase Tech Layoffs Tracker, U.S.-based tech companies will be cutting at least 18,873 jobs in 2024, with 6,471 of those layoffs coming in the week that ended on 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, according to a Feb. 5 SEC filing, 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 more than 33,000 jobs 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 6 percent of its workforce, which Layoffs.fyi estimated to be about 440 employees.

Precisely one year after it announced plans to lay off 300 of its employees, or about 5 percent, Okta, an online identity management software company, announced that it’s cutting another 400 employees, or about 7 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 multibillion-dollar restructuring plan to streamline and cut costs—the company’s stock has seen a steep and steady rise. On Feb. 7, the family entertainment giant also reported better-than-expected first quarter earnings, stating that the “results reflect the progress” it has made through its “strategic transformation” and that it is “on track to meet or exceed its ”$7.5 billion annualized savings target by the end of fiscal 2024.”