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The three supporting readings tell you how much weight to put on the probability: confidence reflects category-level track record, stability tracks how the estimate has moved over time, models shows whether the four agree.
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As of late 2023, tech sector layoffs have been influenced by rising interest rates and inflation, with over 120,000 layoffs recorded in 2023 alone. Companies like Meta and Amazon have already provided warnings about cost-cutting measures going into 2026, suggesting a trend that could persist. Additionally, with ongoing economic uncertainty and potential weak demand in tech services, the likelihood of significant layoffs remains high.
The tech sector experienced significant layoffs in 2022 and 2023, exceeding 200,000 in both years according to Layoffs.fyi. While 2024 has seen a slowdown, many companies are still rightsizing after over-hiring during the pandemic and facing a more challenging funding environment. Persistent inflation and higher interest rates are likely to continue to pressure profitability, making further cost-cutting measures, including layoffs, probable in 2026.
The US tech sector announced approximately 260,000 layoffs in 2023 and 102,000 in 2024, establishing a baseline where 100k+ layoffs occur regularly during periods of economic adjustment. Current conditions show mixed signals: the Fed maintains elevated rates (5.25-5.50% as of late 2024), AI hiring has normalized after explosive 2023 growth, and several major tech firms (Meta, Amazon, Microsoft) have signaled continued cost optimization through 2025-2026. However, 2024's layoff pace declined 60% from 2023 peaks, suggesting moderation. A recession entering 2026 would substantially increase probability to 75%+, while sustained economic growth and rate cuts would lower it to 40%.
US tech employment has stabilized after 263k layoffs in 2023 and 95k in 2024, with 2025 YTD at 48k; however, the 2024-2025 AI capex surge ($200B+ for Nvidia, Microsoft, Google, Amazon) creates concentrated hiring that may reverse if AI monetization disappoints, while Fed rate cuts to 3.75-4.00% by late 2025 and potential H1B restrictions under new immigration policy could trigger efficiency layoffs exceeding 100k in 2026. Historical precedent shows 2022-2023 tech downturn produced 150k+ cumulative cuts when growth slowed below 15% YoY.