AI hiring frenzy to fuel layoffs in other tech segments as firms strive to balance costs

As tech firms prioritize investments into artificial intelligence and go on a hiring spree, other segments are likely to see layoffs continue into 2024, according to industry experts.

More than 20,000 tech employees have already lost jobs so far in 2024, according to tracker layoffs.fyi.

"Google and the rest of Big Tech are betting big on AI while cutting back on non-strategic areas. Layoffs will continue to happen for Big Tech in some areas while the hiring frenzy in AI will be unprecedented as this arms race continues across the tech world," Dan Ives, managing director at Wedbush Securities, told CNBC.

Google CEO Sundar Pichai last week warned employees there would be more job cuts this year as the company continues to shift investments toward AI.

"We have ambitious goals and will be investing in our big priorities this year," Pichai wrote in a Jan. 17 memo to employees, adding that the management was gearing up to share its AI goals and objectives for 2024. "The reality is that to create the capacity for this investment, we have to make tough choices," Pichai said.

Google slashed hundreds of jobs earlier this month in its push for efficiency and to focus on its "biggest product priorities," as it plays catch up with rival Microsoft which has integrated ChatGPT into Bing search, and prompted Google to beef up its search engine with AI features.

"We're not living in a zero interest rate environment anymore. And now they really need to find ways to cut costs so they can invest here. Training AI, deploying AI is very expensive. And I think that's what's happening with Google today," said Alex Kantrowitz, Big Technology founder, on CNBC's "Power Lunch" last week.

"That is something that I expect other Big Tech companies to