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In technology, new trends often create excitement and surprise, whether it’s a new sector that every venture capitalist is clamoring for an investor in, or the emergence of a new technology you’ve never heard of. Until you just listen to him.
But one of the biggest trends in tech this year is the dark redundancies. We can talk more about specific resignation themes. And we have. More than 780 companies have cut a portion of their workforce this year, according to data tracker layoffs.fyi. The workforce cuts affected at least 92,558 known people. Due to reporting delays, the actual figure may be higher.
But the same data source suggests the tide is turning somewhat on tech cuts. Almost 70% of the people laid off this year lost their jobs in May, June, July and August. Staff cuts have slowed since the summer of mourning. September had about half the number of layoff events as in August, and in October, layoff events slowed to a slight upward trend from August.
There are two large stars for these figures. First, layoffs.fyi only tracked publicly reported layoff events, which means there may be many more under the hood (especially smaller layoffs) that are not tracked. Second, zombies.
Zombie companies are basically companies that raised a lot of money earlier in the growth cycle but didn’t generate nearly enough revenue to justify historical valuations. The late market is full of them, a founder told me recently, and it takes time to realize this because many are capitalized and have enough runway to hide.
In other words, more layoffs may come after companies leave runways. Today’s numbers give us time proof of how far we’ve come in this correction.
Needless to say, layoffs did not go away. Just today, Zillow announced that it is cutting 5% of its workforce, affecting 300 employees. Yesterday, Cerebral cut its staff by 20%. Covid-19’s impact on the tech sector has seen some of the biggest layoffs this year, including Gethir’s 14% decline, Baiju’s fall from grace and Better.com’s plight.
Still, I’m relieved (and you might be too) that the decline is slowing down. I don’t want to overstate things, and I understand that this is completely exciting stuff, but hopefully 2022 will end quietly and 2023 will be even quieter.
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