The Startup Layoffs Have Started
Michael Spencer
A.I. Writer, researcher and curator - full-time Newsletter publication manager.
Are Tech Layoffs Accelerating?
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In the last week of May, signs that everything is changing are showing.
Startups are being asked to trim staff to save on costs.
Hey Guys,
Just a quick note.
It's no secret, the U.S. startup tech layoffs have begun. (Source: Crunchbase)
In May, 2022 - 15k tech layoffs occurred. (Source: Yahoo News).
It’s fairly interesting to watch if you work in Tech or want to work in software engineering as the intended audience of this Newsletter.
The number of people let go are high:
- Klarna: ~700 (~10%)
- Bolt: ~200 (around 30% of employees)
- Netflix ~150 (around 2%)
- Laceworks: ~300 (around 20%)
- Getir: more than 4,000 (~14%, this includes delivery people)
- Gorillas: more than 300
- Vroom ~ 270 (around 14%)
- Skillz: ~70 (~10%)
See the full list here for U.S. based startups and companies.
- Hiring freezes
- Startup layoffs
- VC warnings
During the last week alone:
- Most of these companies are laying off tech people, including software engineers.
Compared to April, 2022, thinks have been accelerating a lot in May with the layoff trend.
Some sectors of startups have been particularly hit bad like:
- Delivery startups e.g. (Getir, Zapp Join Delivery Startups Cutting Staff).
- FinTech, payments and BNPL startups
Read the article.
Recommended by LinkedIn
15,000 Let Go in May, 2022
TechCrunch rounded up week after week of layoffs, and according to aggregator layoffs.fyi , more than 15,000 tech workers have lost their jobs this month, May, 2022.
Multiple companies relating to startups have been making warnings and best practice procedures including Y Combinator and others. Hacker News is now full of people being let go and advice on how startups should “fire quickly but take responsibility ”.
The Pragmatic Engineer of Substack has been covering this as well, see his LinkedIn post here.
Different day of the week, different startup being impacted.
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Read the article.
Venture Funds are Drying up
With venture funds drying up, layoffs looming and stock prices plummeting, could the tech boom experienced during the pandemic now be headed towards a historic down-cycle? It certainly looks that way.
Even established BigTech are slowing down hiring considerably in the Spring of 2022. Though the job market remains tight, several large tech companies, including Salesforce, Twitter and Meta, have slowed the hiring of new staff amid rising inflation and market uncertainty; other companies have decided to cut jobs entirely.
This might impact Europe even worse in the Tech Sector. The tech company layoffs have hit Europe. Several of Europe’s best-known startups have made drastic cuts to their teams in order to cut costs and preserve their cash runway as the global economy takes a downturn.
A number of tech companies that enjoyed pandemic-related surges are facing a correction, due to a number of factors, from rising inflation, economic distress, war and shifting consumer behaviors. All to say, confidence is plummeting in terms of startups making arrangements for tougher conditions.
Let’s face it the job market may not have stayed red hot in 2022. Several tech companies have recently announced hiring freezes and layoffs. Startups who were pumped liquidity during the QE years 2020-2021, might have to face reality in the coming months and it won’t be pretty.
Back two weeks ago, economists didn’t yet think that the tech slowdown necessarily meant a broader hiring slowdown is on the way. But how quickly things change, startup layoffs certainly seem to be accelerating.
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What do you think? Is the second half of May showing an acceleration in layoffs among high-flying startups and a slowdown in Tech hiring?
A.I. Writer, researcher and curator - full-time Newsletter publication manager.
2yFurther reading: fresh off the press: https://www.cnbc.com/2022/05/28/start-up-investors-issue-warnings-as-boom-times-unambiguously-over.html
Co-Founding @balance_systems
2yJust wanted to touch base real quick. You get recommended to me quite often, and your content is always great
Building your (hybrid) SOC
2yGreat article. I personally think that layoffs are not limited to startups. It was only the start of mass layoffs globally. Once the layoffs at growth (startup) companies peak, it will move to grown up value companies. It’s recession time but the music is still playing - for now.
A.I. Writer, researcher and curator - full-time Newsletter publication manager.
2yMay felt a lot different than April, 2022. As the stock market plunges and earnings slows, guidance for the future is pessimistic for once high-flying startups that were pumped with cash and optimism. What will the Summer of 2022 bring?