Tech layoffs have accelerated as the year has progressed.
June was the most active month for tech layoffs so far this year, with at least 75 reports of U.S.-based tech companies initiating layoffs, according to a Crunchbase News analysis of aggregated layoff data. At least 143 U.S. tech companies have laid off more than 24,000 people so far this year, and it’s unclear when the cuts will slow down.
Tech and tech-adjacent companies have been going through layoffs all year, but it wasn’t until late spring that the cuts really picked up.
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In January, for example, there were only reports of three companies laying off employees: insurtech company Root Insurance, beauty brand Glossier, and fitness company Beachbody. February followed a similar pace, with just four reports of U.S. tech companies initiating layoffs. That included high-profile “pandemic winners” like virtual events platform Hopin and connected fitness company Peloton.
In a way, it was a signal that the companies that benefited from the COVID-19 pandemic lockdowns and grew ultra-fast to keep up with demand perhaps grew too fast and would have to adjust to the realities of the market in 2022.
It was in May that layoffs really picked up, with at least 35 U.S.-based tech companies slashing headcount. That number more than doubled in June to 74 companies, or more than half of the companies in Crunchbase News’ Tech Layoffs tracker.
There are a couple reasons why June was such an active month for layoffs. First, it’s near the end of the quarter, and companies were likely making moves to get their finances in order and priorities straight before the start of Q3 and the second half of the year. It’s clear that layoff reports ramped up toward the second half of June.
Second, the public markets were particularly rocky in June, and the Federal Reserve’s largest interest rate hike since 1984 didn’t help. The past month or so, fears of a recession have become more real, and companies are taking preventative measures to control costs.
SMS marketing startup Postscript, for example, laid off 43 people just a week after announcing the raise of its $65 million Series C. CEO Alex Beller said in a Twitter thread that the round was closed in the first quarter of 2022, and since then, “the economic landscape has radically shifted.”
Other companies have also cited the macroeconomic environment and desire to control costs ahead of a possible recession as reasons for layoffs.
Some of the most notable layoffs in June were Netflix’s second round of cuts, two major video game players’ layoffs (Unity Technologies and Niantic Labs), and a slew of crypto companies including Gemini, Coinbase and BlockFi.
So far in July, 10 companies have announced layoffs, including Outschool, Celsius and Teleport. We have a feeling they won’t be the last.
Illustration: Dom Guzman
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