Why Tech Companies Are Cutting Jobs? Mark Zuckerberg Explains

The global tech industry has witnessed massive layoffs in 2024. Tech giants are trying to put a cap on the over-hiring that happened during the pandemic. Notably, firms are also prioritizing new investments in generative AI. Meta CEO Mark Zuckerberg recently shed light on the ongoing layoffs in the tech sector.

In a recent interview with Morning Brew Daily”s podcast, Mark Zuckerberg pointed out that firms are finally realising that there are benefits to being “leaner.” The Meta CEO also added that the companies are still adjusting to the post-Covid era. Mark Zuckerberg said that the current layoff trend in the tech industry is not due to the growth of artificial intelligence (AI). “In terms of the layoffs and stuff like that, I actually think that was more due to companies trying to navigate COVID,” Zuckerberg added.

The tech leader explained that the pandemic boom in e-commerce fuelled rapid hiring sprees. However, when the economy adjusted, several firms realised that they had over hired, and the next step was to initiate major cuts in their work force. Mark Zuckerberg said that companies are currently exploring the advantages of operating with a smaller workforce. “We parted with a lot of talented people that we cared about,” added Zuckerberg during the conversation. He also added that becoming “leaner” makes the company more effective.

At the same time, big tech companies and small fintech startups and apps are depending on mass workforce reductions. Snap, the parent company of the social media platform Snapchat, recently announced that it would lay off around 10 percent of its global workforce. According to layoff tracking site Layoff.fyi, the tech sector has witnessed a total of 41,793 layoffs across 159 companies so far in 2024.