Tech layoffs have been expected this year, with giants like Google and Microsoft cutting thousands of jobs. Despite widespread tech layoffs, overall employment remains strong, with a low % unemployment rate of 3.8% in March 2024, according to Bureau of Labor Statistics data.

According to the BLS, the labor market has stayed healthy, with industries like health care, government, and construction hiring 303,000 jobs in March. Despite layoffs, tech companies continue to recruit workers skilled in AI and machine learning due to high demand. However, uncertainties like inflation make forecasting 2024's economic outlook challenging.

When Facing Layoffs, Who Usually Gets Chosen First? 

Newer employees are often the first to be laid off, following the "last in, first out" principle. This includes recruiters and higher earners in some cases. Upper management may revise the business plan, aligning layoffs with new priorities and focusing on revenue-generating projects over nonessential ones. Employees with outdated or surplus skills are at higher risk of being laid off.

While layoffs can usually happen anytime, tech layoffs often occur in January and December when companies check their budgets. 

Here are some signs your company might be getting ready for layoffs:

1. Cutting Positions Without Replacement

"Involuntary attrition" is when a company removes a position entirely once an employee leaves, resulting in a smaller, more efficient workforce. As tech companies increasingly adopt artificial intelligence and automate tasks, some may permanently cut specific positions to allocate more funds to AI-related roles.

2. Hiring and Spending Freezes

Hiring and spending freezes are ways for companies to save money and cut costs. For instance, during the economic downturn in early 2022 caused by increased inflation and interest rates, many tech companies stopped hiring and spending to manage their finances, resulting in widespread layoffs later that year.

3. Putting Off New Projects for Later

Shrinking budgets for unnecessary projects or those that don't directly generate revenue may delay new projects. While project delays alone do not guarantee impending layoffs, they can be a warning sign.

4. An Upcoming Company Merger or Acquisition

While mergers and acquisitions bring together two companies' strengths to enhance profitability, they can also result in layoffs to eliminate duplicate employee skill sets. For instance, Microsoft laid off 1,900 workers from its gaming division after acquiring Activision Blizzard.

5. Executives Resignation

At higher levels, executives have a clearer view of a company's financial trajectory. They might leave before a collapse, signaling a lack of confidence in the company's ability to handle challenges or implement recovery plans.

6. Previous Layoffs

Companies regularly laying off employees may indicate long-term financial instability. However, past or ongoing layoffs aren't always a cause for concern. Hemming explains that it's common for companies to undergo layoffs while simultaneously hiring new employees.

7. Company Overhaul

Company restructuring involves strategically realigning a company's resources with its changing requirements. Sometimes, it consists in evaluating and eliminating unnecessary job roles. For example, in early 2024, technology giant Cisco laid off 5% of its global workforce as part of a restructuring effort to prioritize high-growth areas like AI and software.

READ ALSO: Google Layoffs Continue, Raising Workers' Fears of Being Replaced by AI Technology They Are Creating

8. Reduced Focus on Research and Development (R&D)

Research and development (R&D) investment is vital for the long-term growth of a tech company, given the industry's dynamic nature, and cutting costs in this area could suggest that nonessential roles are also being eliminated.

9. Decreasing Company Performance

Tech companies may downsize their workforce due to dwindling revenue and poor company performance. Prolonged periods of underperformance might necessitate job cuts and reassessing its business strategy.

10. Labor Outsourcing

Outsourcing labor can be a cost-cutting measure prioritizes savings over employing local workers. Employers may also opt for restructuring and reorganizing to reduce in-house roles.

11. Circulation of A WARN Act 

The Worker Adjustment and Retraining Notification Act (WARN) typically mandates posting notices in workplaces before permanent closures or significant layoffs. This serves as a clear indication of impending job cuts. According to the Department of Labor, employees who do not receive at least 60 days of written notice about layoffs may pursue damages and back pay from their employers.

WARN safeguards workers in companies with over 100 employees, provided they have been with the company for over six months.

12. Scheduled Emergency Meeting

The sudden arrival of an email or calendar invite for an urgent companywide meeting often indicates that management is prepared to address significant staff changes.

13. Arrival of Outside Consultants 

If a tech company is contemplating laying off employees, it might initially engage consultants to evaluate company performance and analyze potential operations restructuring, including identifying redundant employees.

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