Continuing the trend from 2023, more major layoffs are coming in 2024.
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.
“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.
The Banking IndustryAs 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.
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.
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.”
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.
The Tech IndustryThe tech industry is also beginning the new year with the same strategy that it ended with in 2023: sector-wide job cuts.
On Feb. 7, Grammarly, a company that provides a digital writing assistance program, cut 230 jobs.
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.”
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