Artificial intelligence Layoffs Startups

Tech Layoffs May Have Peaked, But They’re Still Accumulating

Illustration of paper people in trash can. [Dom Guzman]

Tech layoffs are stubbornly continuing to pile up.

True, we’ve seen some slowdown in mass job cuts from large-cap technology companies in recent months. However, layoff disclosures from  startups and small to mid-sized companies continue to roll in at a steady pace.

Per The Crunchbase Tech Layoffs Tracker, more than 270,000 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. Cuts come as companies contend with rising interest rates, a tougher fund-raising climate, and tightened customer budgets.

The number of announced cuts peaked early this year, exceeding 65,000 in January alone. Over the past six months, monthly disclosed U.S. tech industry layoffs have hovered between 3,000 and 11,000.

The totals include several once-prominent startups that are now winding down. This counts several in the past couple months, such as short-term housing provider Zeus Living, logistics technology developer Slync, and digital freight network Convoy.

Several companies that are still in operation also laid off a large percentage of staff. So far this month, for instance, NFT marketplace OpenSea laid off half its staff, neighborhood social network Nextdoor cut 25%, and alternative protein-maker Beyond Meat reduced headcount by 19%.

Tech giants, including Amazon and Google, also carried out layoffs this month, but did not disclose the number of job cuts.

But while cuts are still happening, some of the core drivers of layoffs a year ago have dissipated, said Andy Challenger, senior vice president of employment consultancy Challenger, Gray & Christmas. For instance, post-COVID shifts in consumer behavior that drove some job cuts, such as reduced online shopping, have mostly leveled off.

More layoffs

Nonetheless, it is likely premature to presume that U.S. tech industry job cuts will be winding down anytime soon.

“Our medium run projection over the next few months is continued layoffs,” Challenger said. He noted that the spate of interest rate hikes that began early last year is impacting employment and leaving employers less confident about their ability to raise prices.

The reverse of mass layoffs — major hiring announcements — are also not a big thing these days in tech, with the exception of a few hot spots like generative AI. Overall, Challenger said he is seeing more layoff announcements in recent months than hiring announcements.

Illustration: Dom Guzman

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