Tech layoffs are mounting, and prediction markets suggest the worst may not be over. Traders on Kalshi are actively betting on further job cuts in the industry, with markets currently showing:
- 50% chance on Kalshi that February 2025 layoffs in the information sector will exceed 1.1%, with results set to be confirmed on April 1.
- 54% probability on Kalshi that more tech layoffs will occur in 2025 than in 2024, indicating continued uncertainty about the sector’s stability.
The wagers come as the tech industry faces rising cost pressures, AI-driven restructuring, and slowing growth in key markets. If the prediction markets are correct, the ongoing wave of job cuts may accelerate in the coming months.
Layoff announcements
Several major tech and adjacent companies have announced significant workforce reductions in recent weeks.
Volkswagen, the automotive giant, plans to lay off 1,600 employees at its Cariad software unit by the end of the year, affecting nearly 30% of Cariad’s workforce, according to Reuters. The restructuring is part of an effort to boost efficiency and streamline operations.
Hewlett Packard Enterprise (HPE) announced 2,500 job cuts, roughly 5% of its global workforce, over the next 18 months as part of a cost-cutting initiative, its Chief Executive Officer Antonio Neri told Bloomberg, despite exceeding revenue expectations in the last quarter.
Hundreds of jobs at TikTok’s Irish base are at risk, with up to 300 positions potentially being eliminated as part of parent company ByteDance’s global restructuring, announced by the government, reported by The Sun.
Grubhub announced 500 job cuts after it was sold to Wonder Group for $650 million, as reported by Reuters. The number of cuts affected more than 20% of its previous workforce.
The case for more layoffs than last year
Prediction markets pricing in a 49% chance of more tech layoffs this year than in 2024 signals continued concerns about the sector’s stability. Several key factors support the case for further job cuts:
AI Disrupting Traditional Tech Jobs
As automation and AI-driven efficiencies improve, fewer human employees are needed in fields like customer support, data analysis, and content moderation
Higher Interest Rates Are Limiting Growth
Despite hopes for Federal Reserve rate cuts, borrowing costs remain high. Rising capital costs make it harder for tech firms to justify expansion, leading to hiring freezes and layoffs.
Big Tech Slowing Down After Years of Hypergrowth
From 2020-2022, major tech companies went on a hiring spree to keep up with explosive pandemic-era demand. Now, firms like Meta, Amazon, and Google are downsizing bloated teams and eliminating redundant roles.
The case for fewer layoffs than last year
Not everyone is convinced that tech job losses will accelerate. Some analysts believe that hiring could stabilize or even rebound by mid-2025 as companies adjust to new market realities.
Tech Hiring Could Pick Up in AI and Cloud
While some legacy tech roles are disappearing, demand remains strong for AI specialists, cloud engineers, and cybersecurity experts.
Federal Reserve Rate Cuts Could Spur Expansion
If the Fed begins cutting interest rates later this year, tech firms could find it easier to borrow and invest, leading to a hiring rebound.
Some Companies Are Still Hiring
Despite the layoffs, some tech firms are still expanding, particularly in AI, cybersecurity, and semiconductor manufacturing. Nvidia and AMD continue to hire aggressively, fueled by the AI boom.
Prediction markets remain divided, with traders pricing in a 49% chance that 2025 will see more tech layoffs than 2024.
While AI-driven job cuts, high interest rates, and cost-cutting measures suggest that layoffs could continue, a potential hiring rebound in AI and cloud computing, as well as expected Federal Reserve rate cuts, could stabilize employment later this year.
The key test will be April 1, when the official February 2025 layoff numbers are released. If job losses exceed expectations, markets may brace for a tough year ahead. But if layoffs stabilize, the worst of the job cuts may already be behind us.
