Up till July of 2022, a sad week for the Tech world, more than 32,000 professionals have been laid off in the US, including employees of major internet companies like Microsoft and Meta (previously Facebook), and the worst is still to come for the industry.
According to data provided by Crunchbase, more than 32,000 workers in the tech sector have been let go as a result of widespread employment cuts until the end of July 2022.
According to the report of Crunchbase; “We’ve included both startups and publicly traded companies that are based in the US. We’ve also included companies based elsewhere that have a sizable team in the United States, such as Klarna,”
Companies that announced layoffs
Major companies announcing layoffs include Uber, and Netflix, along with several bitcoin exchanges and lending platforms.
Some companies that just trimmed their headcount this year include Robinhood, Bettter, and Glossier.
According to the latest data by layoffs. FYI, a website that records layoffs in startups, over 43,000 employees from 342 tech companies/startups have been laid off globally since April 1 this year, with over 13% of them being from India.
Layoffs in India
Since the pandemic’s onset, more than 25,000 startup employees in India have lost their employment, and more than 11,500 have been let go this year.
Tech companies like Unacademy (1,150 employees), BYJU’S (550 at Toppr and Whitehat Jr.), and Vedantu (624), as well as the ride-hailing company Ola (nearly 500), the healthcare start-up MFine (600), and the platform for pre-owned cars, Cars24 (600), are the ones that have experienced the majority of layoffs in India.
Meesho, MPL, Trell, and Blinkit (now bought by Zomato), among other Indian unicorns and businesses, have also made layoffs.
Reasons behind these tech layoffs
In addition to being awful for investors who have invested their hard-earned money in technology, the stock market meltdown is also worrisome for individuals who work in the sector.
Over the last week, the startup ecosystem has experienced an alarming amount of layoffs, ranging from well-known, high-profile startups like Cameo, On Deck, and Robinhood to B2B platforms like Workrise and Thrasio.
According to founders, there has been a shift in the market, necessitating a severe business pivot, which is the common thread throughout the majority of these layoffs. A change of direction that harms the team members that developed your product after the great demand.
1. Consumer behavior changes
A change in the market is the main factor driving founders of digital companies to implement significant layoffs. The “transition” describes how people are less reliant on technology than they were during the pandemic’s peak. People had to use technology for practically everything when COVID first appeared, which aided in the expansion of the tech sector.
2. High-interest rates and rising prices
The rise in interest rates since March of this year is another factor that has harmed tech companies. Due to the low-interest rates in 2021, funding was simple to obtain for businesses.
As a result, they were able to grow and expand without considering a fallback strategy to deal with a slower pace of funding. The U.S. is currently experiencing high inflation rates of 8–9%, hence raising interest rates is the only way to break the inflationary cycle.
3. For techies, what does this mean?
All of this indicates that when IT companies made decisions over the past two years, they did not take into account how their operations might evolve after COVID. Companies overestimated their hiring potential and growth paths. The increased personnel that contributed to this growth now needs to deal with the effects of the fundraising slump.
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