Tech Firms Are Slowing Layoffs But Still Not Yet Resuming Hiring

Workers pass a Google office building in the 'Silicon Docks' area of central Dublin, Ireland, on Monday, Jan. 23, 2023. The Irish government has already been notified of far more potential job losses than have been made public to date, documents seen by Bloomberg News show.

(Bloomberg) -- Tech companies aren't yet ramping up hiring after massive layoffs over the past year, despite a surge in interest in artificial intelligence, requiring workers with special skills.

Still, job cuts in the tech industry appeared to slow in June and July and are on track to be even lower this month, according to an analysis by research firm Jefferies, citing proprietary data as well as that from job marketplace TrueUp.

The tech sector had some of the earliest and steepest workforce reductions as the economic downturn forced companies to cut costs and eliminate a glut of staffing created during the pandemic boom. So far this year, there have been 342,671 layoffs in the tech industry, according to Jefferies and TrueUp, well ahead of the 243,075 for all of last year. Data from layoffs.fyi shows a similar trend.

The number of open jobs in the tech industry remains tepid, the data show, mirroring trends in the broader economy that suggest some softening in demand for workers. US job openings fell in June to the lowest level since April 2021, according to a government report earlier this month. Layoffs also declined to the lowest since the end of the last year, suggesting employers are reticent to let go of staff.

Read more: Layoffs and AI Are Changing Tech's Once-Invincible Job Market

“The shifting workforce dynamic will require lower-skilled workers who are being squeezed by AI to re-skill and up-skill for new job opportunities,” Jefferies analysts led by Brent Thill said in a note accompanying the analysis.

The nuances of the still-resilient labor market have made it difficult even for recruiting companies to predict annual earnings, as clients are “more cautious, more conservative, more tentative,” M. Keith Waddell, chief executive officer of international staffing firm Robert Half, said on a recent earnings call.

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