Tech & media layoffs point towards greater disruption in 2024 – particularly in AI

It all spells bad news for those directly affected, obviously. But for the rest of us, what does it mean?

The recent layoffs lineup reads like a who’s who of tech giants. In the early months of the year, Meta and Microsoft handed pink slips to 10,000 – each. Disney parted ways with 7,000. Amazon slashed a staggering 18,000 jobs. And Google followed suit with 12,000 layoffs.

It's not been the apocalypse, though – more like a strategic game of chess with AI as the queen.

Consider the economic backdrop, which is a bit like a rollercoaster ride at an amusement park – thrilling, but kind of scary. Despite inflation and recession fears in the mix, major economies are still growing – albeit at a more leisurely pace.

The UK is expected to chug along with a 0.7% GDP growth in 2024 while US GDP will grow by 1.5%. Things look brighter for 2025, with growth forecasts ticking upwards.

Further, despite the job-cutting frenzy, many tech and media giants aren't shrinking their customer offers – and some are even expanding. Spotify, for one, is boosting its subscriber count like a hit parade – the company is up to 226 million in Q3 of 2023, up from 195 million the year before.

What’s driving the mass layoffs, then? The answer, in no small part, is AI, which is increasingly being used to perform many mundane tasks. And this is why we may well see further layoffs in 2024 as a direct result.

Back in May, a Gartner study revealed 71% of CMOs believed they lacked sufficient budgets to fully executive their strategy in 2023. Throughout this year, we have definitely see these shrinking budgets – which have impacted both Europe and US revenues and is likely to continue to do so in 2024.

In Denmark, where Kubbco HQ is based, other creative agencies like us have been trimming their sails – cutting between 5% to 10% of their staff in the past year. Word on the street is this is also happening in other markets, including the UK and US – just a bit more hush-hush.

Elsewhere, management consultancies are also feeling the pinch, with Accenture shedding 19,000 jobs, McKinsey more than 1,000 and the ‘big four’ (Deloitte, KPMG, EY and PwC) 1,800, combined, in the past year.

But job cuts are not an inevitable byproduct of the AI revolution.

In our agency, for example, we're embracing AI tools like Chat GPT, Submagic, ElevenLabs, Heygen and Midjourney as we gear up for what might be a seismic shift in how we work.

So, where does this all leave us as we ring in the new year?

We can expect more tech, media and entertainment layoffs as the use of AI advances and organizations drill down on functions where, as a result, they are overstaffed.

However, I also believe we will see talent with AI skills in especially high demand as well as more investment in skills training to ensure existing staff moves from AI literacy to AI proficiency.

Ad revenue growth will be weighted towards digital while traditional media sectors such as TV are likely to see declining ad revenues. And on the agency side, we can expect more mergers akin to WPP’s unification of Wunderman Thompson and VMLY&R into VML. More restructurings – à la M&C Saatchi’s agency consolidation into a “super group” – are surely on the horizon.

Yes, 2024 will be a challenging year, but it will also be a transformative one. This makes now the time for all of us to recalibrate our skills for the AI era, which is heading toward us, fast.

So, let’s do more than just hang on in this over the next 12 months. Let's get ready to play and win the game.