Tech Firms Prioritize AI Investments, Triggering Layoffs in Other Segments

Industry Experts Predict Unprecedented Hiring Frenzy in AI Amid Layoffs Across Tech Sectors


The tech industry is experiencing a notable shift as major companies prioritize investments in artificial intelligence (AI), leading to an anticipated surge in AI-related hiring while other segments face ongoing layoffs in 2024. Experts suggest that this AI arms race will result in significant staff reductions in non-strategic areas within big tech companies.

According to, more than 20,000 tech employees have already lost their jobs in 2024. Google, one of the industry leaders, recently announced the possibility of further job cuts as the company intensifies its focus on AI. Sundar Pichai, Google’s CEO, emphasized the need for tough choices to create capacity for AI investments, signaling a strategic shift in priorities.

The trend of investing heavily in AI while implementing job cuts is not limited to Google. SAP, a German enterprise software firm, announced plans to restructure around 8,000 roles, with a focus on increasing its emphasis on business AI. Amazon, a major player in AI investments, recently laid off hundreds of employees in its video-streaming, studio, Twitch livestreaming, and Audible audiobook divisions.


Industry experts, including Dan Ives from Wedbush Securities and Alex Kantrowitz, founder of Big Technology, anticipate that other big tech companies will follow suit. The growing cost associated with training and deploying AI, coupled with the need to cut costs, is cited as a driving factor behind this strategic shift.

Even companies outside the tech sector are aligning their strategies with AI-driven initiatives. Vroom, an online used-car marketplace, plans to cut about 800 jobs as it shifts its focus toward automotive financing and AI services. Language-learning app Duolingo is reportedly cutting 10% of its contractors as it embraces AI for content creation.

While AI investments are expected to lead to significant job creation, especially in specialized roles, the simultaneous job cuts underscore the evolving landscape and the challenges companies face in balancing their workforce amid technological transformations.