Layoffs
2021 was a good year for most technology companies, especially large ones, with margins reaching record highs, many technology companies, large and small, were on a tear to hire new employees. Of course there were many who struggled with staffing shortages, but with 5.7% of the US workforce employed by a (loosely defined) technology company, and ~80,000 new tech hires last year, technology companies seemed empowered with the desire and capital to broaden staffing, with the only industries having a greater hiring rate being finance, insurance, accounting, and healthcare.
This year has been different and the aggressive hiring of last year and the weaker economy this year have turned that hiring into layoffs at many technology companies, with more than 17,000 US technology workers be laid off so far this year. Generally corporate speak blames COVID-19 while o few acknowledge that over-hiring last year might be a contributing factor, but hiring freezes or layoffs seem to be accelerating as technology profits decline. The good news is that the decline is far from the actual COVID-19 related layoffs seen in 2020 and on an overall basis (all industries) new jobs are being added, but technology companies have seen valuations decline precipitously and VC funding has also slowed (Figure 1).
While likely not a complete list Crunchbase has provided a list of the most notable tech layoffs this year which includes a number of public companies amongst the vast array of private organizations. The list, which includes company or sourced announcements since January 21 is considerably longer than what we show here (50 most recent). The number of layoffs across the top 50 in the list is 7,227 with that representing 17.8% of the workforce on average, only including those where the number of layoffs is verified by source.
This year has been different and the aggressive hiring of last year and the weaker economy this year have turned that hiring into layoffs at many technology companies, with more than 17,000 US technology workers be laid off so far this year. Generally corporate speak blames COVID-19 while o few acknowledge that over-hiring last year might be a contributing factor, but hiring freezes or layoffs seem to be accelerating as technology profits decline. The good news is that the decline is far from the actual COVID-19 related layoffs seen in 2020 and on an overall basis (all industries) new jobs are being added, but technology companies have seen valuations decline precipitously and VC funding has also slowed (Figure 1).
While likely not a complete list Crunchbase has provided a list of the most notable tech layoffs this year which includes a number of public companies amongst the vast array of private organizations. The list, which includes company or sourced announcements since January 21 is considerably longer than what we show here (50 most recent). The number of layoffs across the top 50 in the list is 7,227 with that representing 17.8% of the workforce on average, only including those where the number of layoffs is verified by source.
Global VC, Seed, and Private Equity Funding - 2020 - 2022 YTD - Source: Crunchbase
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