When it comes to technology, emerging trends usually provoke excitement and surprise, whether it’s the hot new sector that every venture capitalist is asking for a stake in, or the emergence of a new technology you’ve never heard of. Until you only hear about it.
This year, however, one of the biggest trends in technology was a dark one: layoffs. We can talk more about the specific redundancy themes. And we have. More than 780 companies have cut some of their workforce this year, according to data tracker fired.fyi. The staff reductions have affected at least 92,558 known individuals. The actual figure is likely higher given the delays in reporting.
But same data source suggests that the tide is shifting somewhat in the cadence of technical layoffs. Nearly 70% of those laid off this year lost their jobs in May, June, July and August. since the summer of sorrow, staff cuts have eased. September had half the number of layoffs than August, and new layoffs slowed in October, while people rose slightly from August.
There are two big asterisks on these numbers. First, layoffs.fyi has only tracked publicly reported and tipped layoffs, meaning there could be a lot more beneath the surface (especially smaller layoffs) that are not being tracked. Second, zombies.
Zombie companies are basically companies that have raised a lot of money during the boom, but are not nearly generating enough revenue to justify the historical valuation. The late stage market is full of them, a founder told me recently, and it will be a while before we realize this, as many are overcapitalized and have enough runway to hide behind.
In other words, there may be more layoffs later on if companies no longer have a runway. Today’s numbers give us a time check of how far we are in this re-correction.
Needless to say, the layoffs haven’t gone away. Just today, Zillow announced it would cut 5% of its total workforce, affecting 300 employees. Yesterday Cerebral laid off 20% of its employees. Some of the biggest layoffs since the start of the impact of COVID-19 on the tech sector have happened this year, with Getir’s 14% cut, Byju’s fall and Better.com’s deteriorating situation.
Still, I’m relieved (and maybe you too) that the layoffs are waning. I don’t want to mess things up, and I realize that these are totally cursed things, but hopefully 2022 ends calmly and 2023 begins even calmer.