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Have Tech Layoffs Peaked?

Illustration of pencil eraser erasing workers

When will the layoffs end? The question is top of mind for anyone who works in the tech sector, whether they’ve watched friends and co-workers lose their jobs or been handed a pink slip of their own.

The tech industry has undergone a major reset since the glory days of 2021. By our count, at least 250,000 tech workers in the U.S. alone have lost their jobs since the start of 2022 — likely many more, as we often don’t have reliable layoffs figures for smaller startups.

This year has been particularly brutal, with more than 150,000 U.S. tech workers laid off by mid-2023, per The Crunchbase Tech Layoffs Tracker. That puts us on track to more than triple the roughly 93,000 job cuts we recorded in all of 2022.

In recent weeks, we’ve also seen numerous startups shut down completely, laying off their entire staff. Other companies have become repeat offenders on our layoffs tracker.

But is the wave of layoffs slowly subsiding?

We track total reported tech job cuts, as well as the number of companies reporting layoffs, by month below.

As you can see, November and January were particularly bleak, with both total job cuts and number of rounds surging as many companies rushed to cut costs and cull their ranks around the start of the new year.

The vast majority of the November and January layoffs, however, were conducted by public companies, not startups. This year, just five public companies — Amazon, Alphabet, Microsoft, Meta and Ericsson — have collectively sacked more than 56,000 workers. (It’s worth noting, though, that those companies ramped up hiring like crazy in 2020 and 2021. An earlier analysis we did found that Big Tech layoffs this year had clawed back only 8% of their pandemic-era growth.)

Starting in April, both recorded job cut totals and number of rounds on the Layoffs Tracker have subsided, averaging around 6,800 workers cut in 41 rounds per month since then. Compare that with the monthly averages we saw in January 2022 and March 2023: around 15,000 and 53, respectively.

Startup layoffs

Let’s focus specifically on private companies.

The layoffs peak hit later for startups than tech overall, with a high of 5,723 recorded private company job cuts in February 2023. March was bad, too, with 5,128 job cuts — just a smidge below November 2022, which was the second-worst month for U.S. startup layoffs.

The number of startups making job cuts has dropped, too. While on average, 50 private companies cut tech jobs in the U.S. each month in the first three months of the year, since April we’ve seen that half to an average of 25 rounds per month.

Does all this mean tech layoffs are now over? Probably not.

Many fledgling startups are just now truly grappling with a venture-funding downturn that has moved into the angel, seed and early stages as well. More young startups are also stuck between seed and Series A, Crunchbase data shows, and then taking longer to raise a Series B.

Companies that aren’t able to get fresh funding to sustain themselves have two options to keep going: Increase revenue — which is tough to do in a downturn — or cut costs. For almost every software company, the biggest expense, by far, is payroll.

Last week alone, we added 16 companies to our Tech Layoffs Tracker — much higher than the nine or so rounds per week we’ve been averaging this year. (But that could be at least in part because the previous week was a holiday week, when many companies likely delayed layoffs announcements.)

We could see startup layoffs rise again as more companies run out of options. Just as likely, while the brutal layoffs totals we saw in late 2022 and early 2023 might be a thing of the past, tech companies could continue to steadily shed workers in dribs and drabs for a while longer.

Illustration: Dom Guzman

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