In tech, emerging trends usually elicit excitement and surprise, whether it’s the hot new sector that every venture capitalist is clamoring for a stake in, or the rise of a new technology you haven’t heard of. Until you only hear of it.
This year, however, one of the biggest trends to form inside tech was a darker one: layoffs. We can talk more about the specific layoff themes. And we have. Over 780 companies cut a portion of their staff this year, according to data tracker layoffs.fyi. The workforce reductions have impacted at least 92,558 known people. The real figure is likely higher given reporting delays.
But the same data source suggests that the tide is somewhat shifting on the cadence of tech layoffs. Nearly 70% of people who have been laid off this year lost their jobs during May, June, July and August. Since the summertime of sadness, staff cuts have decreased. September had half the number of layoff events than August, and in October, new layoff events slowed while people impacted slightly inched upward from August.
There’s two big asterisks to these figures. First, layoffs.fyi has only tracked publicly reported and tipped layoff events, meaning that there could be many more underneath the surface (especially smaller scale layoffs) that are not being tracked. Second, zombies.
Zombie companies are basically companies that raised a ton of money over the boom cycle but aren’t producing nearly enough revenue to justify the historical valuation. The late-stage market is full of them a founder recently told me, and it will take a while for us to realize this because many got overcapitalized and have enough runway to hide behind.
In other words, more layoffs may come later once companies run out of runway. Today’s numbers just give us a time check on how far into this recorrection we are.
Needless to say, layoffs haven’t disappeared. Just today, Zillow announced that it was cutting 5% of its total workforce, impacting 300 employees. Yesterday, Cerebral cut 20% of its employees. Some of the biggest layoffs since the beginning of COVID-19’s impact on the technology sector happened this year, with Getir’s 14% cut, Byju’s’ fall from grace, and Better.com’s worsening situation.
Still, I’m relieved (and maybe you are too) that the layoffs are slowing down. I don’t want to jinx things, and I realize this is totally jinxing things, but hopefully 2022 ends quiet and 2023 starts even quieter.