(AdobeStock)

Apple, Dell, Intel… the headlines about layoffs in the technology industry are endless. But don’t think that only Silicon Valley is suffering the consequences. A closer look reveals a wave of layoffs in several research and development-intensive industries.

Tesla laid off 14,000 employees (10% of its workforce) in April 2024. Other transportation companies cutting jobs include electric vehicle makers Fisker, Lucid Motors, Rivian and e-bike company Rad Power Bikes.

However, the technology sector has not seen so many sustained mass layoffs since the dot-com crash.

In R&D-heavy industries, savings in hardware and infrastructure increased

In the hardware sector, Dell is reportedly cutting around 12,500 employees as part of a restructuring. The move is in line with the company’s focus on AI through a new group, according to a report by Channel Futures. Other hardware-related cuts include Intel’s plans to reduce its workforce by around 15,000 employees. Meanwhile, GoPro announced plans to lay off 15% of its employees, while Sonos cut 6% of its workforce. Other companies cutting jobs include infrastructure company Fastly (11% of workforce), edge computing and security company Stackpath (completely closed), internet regulatory body ICANN (33 employees, 7% of workforce) and cloud distribution platform Pax8 (5% workforce cut).

In healthcare, Ginkgo Bioworks, a biotech company that raised $1.6 billion in 2021 via a SPAC, cut its workforce by 35% and laid off 400 employees. Personalized healthcare provider Care/of ceased operations entirely, cutting 143 jobs. And Cue Health, known for its at-home COVID-19 test kits, laid off 230 employees (49% of its workforce) and closed a manufacturing facility in May.

The impact is not the same everywhere. This chart shows which R&D-heavy sectors are feeling the greatest pressure to lay off workers.

Layoffs in R&D-intensive sectors compared to others (data from Kaggle)

The pace of layoffs in the technology sector has largely stagnated, but not in August

Layoffs have become a recurring theme across the technology industry, but have been gradually reduced compared to 2023 totals. But August 2024 was a rough month, with Intel, Dell, Cisco and Apple all laying off employees. According to data from the Bureau of Labor Statistics, the pace of job cuts in the information sector, an indicator of the technology industry, has not slowed as some other sources had suggested. Cuts in the information sector increased slightly from 0.90% in June 2023 to 1.00% in June 2024 (preliminary), a change of 0.10 percentage points.

While technology companies are making targeted cuts, often focused on specific departments or projects, many are touting investments in AI and automation projects. Some companies began hiring in strategic areas while cutting staff in others. This is reflected in data from the Bureau of Labor Statistics, which shows that R&D-intensive industries such as manufacturing, IT and transportation had a higher average layoff rate (1.17%) than non-R&D-intensive industries (0.86%) in June 2024, based on preliminary data.

Retail, consumer goods and transport most affected

Technology-related sectors such as data and security are in the mid to low range of layoff numbers. Cybersecurity in particular has long suffered from a skills shortage, which may be contributing to the relatively low layoff numbers. This trend may indicate that despite general cutbacks in the industry, there is still a need for skills in these areas.

Layoffs by percentage of cuts (percentage data not available for all entries) (data from Kaggle)

While experts argue about whether AI is more likely to displace or create jobs, the technology is likely to be disruptive for many either way. The World Economic Forum predicts that AI will lead to the destruction of 85 million jobs and the creation of 97 million new ones by 2025, with job losses and gains spread unevenly across sectors. The WEF notes that roles involving routine, manual tasks are most vulnerable to automation, while jobs in technology, data science, and AI-driven fields are likely to see increased demand. While the outlook for STEM fields appears generally positive, industries that rely heavily on routine manual tasks, such as natural resources and chemicals, have greater potential for automation: 64% and 56% of tasks in these sectors could be automated, respectively.

Conversely, industries such as Software & Platforms and Communication & Media show that a significant portion of the workforce is engaged in tasks that are more likely to be augmented than fully automated. For example, in the Software & Platforms industry, 28% of tasks are identified as having potential for augmentation.

The WEF sees mixed prospects for the life sciences and high-tech industries, where 50% of tasks are classified as non-linguistic tasks that are generally less susceptible to automation. Nevertheless, a significant portion of work (17% in life sciences and 16% in high-tech) still has the potential to be augmented by AI, particularly in areas related to data analysis, research and development.