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Meta announced on Wednesday that it was reorganizing some of its biggest businesses, resulting in job cuts at Instagram, Reality Labs, and WhatsApp.

The most recent layoffs at Meta are a sign that some employers are willing to make recurring cutbacks.

That's a change from a "big cuts" mentality.

The September jobs report revealed that industries such as healthcare, government, social assistance, and construction are steadily adding jobs, painting a somewhat positive picture of the job market.

However, despite the stability in these sectors, other parts of the economy are seeing increased job cuts, especially in tech.

Although layoffs remain low overall, there has been a notable increase in job cuts in specific areas. Companies are not only laying off workers, but also slowing their hiring processes. Businesses are increasingly turning to artificial intelligence (AI) as a cost-cutting measure.

All eyes are on the job market as investors eagerly await signs of whether the economy is headed for a soft landing or a downward plummet.

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Layoff Impact

According to a report from human resources firm Challenger, Gray & Christmas, which specializes in career transition and outplacement services, “layoffs are creeping up, and job openings are drying up.”

 This analysis suggests that ongoing job losses not only harm worker morale but also fail to provide a long-term solution for companies.

Technology, in particular, tops the list for the highest number of layoffs in any sector this year. While tech layoffs have slowed compared to recent years, they remain elevated as companies recalibrate from pandemic-era hiring surpluses.

Interestingly, white-collar jobs have been significantly affected, despite blue-collar workers traditionally being the most impacted by economic downturns.

Much of this shift is attributed to AI adoption, which is driving job disruption across the tech sector. With AI replacing jobs, further job cuts may be on the horizon.

Job Cuts by the Numbers

Challenger, Gray & Christmas’ analysis of the Job Openings and Labor Turnover Survey (JOLTS) shows that companies have announced 609,242 job cuts so far in 2024.

This represents an increase of 0.8% compared to last year. September alone saw 72,821 job cuts, which is a 53% increase from the same month in 2023.

AI is a growing factor in these layoffs. In September, AI accounted for 5,616 job cuts, contributing to a total of 12,742 AI-related layoffs in 2024.So far, all of these AI-driven cuts have been within the tech industry.

Disrupted Hiring Plans

Hiring plans are definitely on the decline. 

US employers announced 403,891 planned hires in September 2024, a 32% drop from last year. This is notable since September typically has increased hiring to fill positions before the end of the fiscal year and the holiday season.

These trends indicate that companies are trying to boost profitability in a slowing economy by cutting costs, either through job automation or workforce reduction. 

In September, cost-cutting was cited as the reason for 15,750 layoffs, with store closures contributing to another 14,054 and market conditions accounting for 6,933 cuts.

Boosting Profit

After widespread layoffs in 2022 and early 2023, many tech companies have shifted to a more strategic, department-by-department approach to job cuts.

Major firms like Google, Amazon, and Microsoft have made significant reductions, but trying to move toward more modest trimming.

Google, for instance, started 2023 by cutting 12,000 jobs, about 6% of its workforce, and followed that with smaller cuts throughout the year.

Meta has been cutting jobs in some areas and expanding in others. According to analysts, Meta is no longer hiring VR engineers, but has ramped up hiring for AI engineers, which aligns with industry trends.

Meta CEO Mark Zuckerberg’s decision to make these cuts was “beautifully rewarded” by the market, as the company's stock price rose following the layoffs.

Zuckerberg even dubbed 2023 Meta’s "year of efficiency," signaling that this leaner approach to staffing could continue.