It seems that the tech world is taking an unexpected turn as layoffs are on the rise again. According to data, there has been a significant surge in staff cuts after a period of low reductions in human capital. It was once believed that tech layoffs were a thing of the past, with reported cuts slowing down and hitting a record low. But as we approach 2024, the situation has flipped and we are now witnessing an unsettling wave of layoffs.
Previously, it was speculated that the increasing value of tech companies may have alleviated some of the pressure, resulting in more targeted layoffs rather than large-scale ones. However, as we enter the new year, this theory has been disproven.
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The recent layoffs have affected companies of all sizes in the tech industry. Veho, a package delivery company, had to let go of one-fifth of its workforce, totaling to 65 employees. Even mid-sized tech companies that experienced rapid revenue growth in 2023 are now making cuts. This has become evident with Brex’s recent layoffs, showing that not even well-known and well-funded startups are immune to the effects of the pandemic. The big players in the industry, such as Microsoft and Google, have also announced their own layoffs. Microsoft has already let go of 1,900 employees, while Google plans to make more cuts throughout the year. When it comes to staggered layoffs, it seems like a subtle way of pushing employees to quit rather than forcing them out, causing a higher total attrition rate.
Although it may be tempting to rely on anecdotal evidence, it’s important to look at historical trends to understand the severity of the situation. Fortunately, we have the data at our disposal and it confirms that the increase in layoffs is not just a series of random events. Let’s take a closer look at how tech companies are downsizing their workforce and try to make sense of why this is happening.
Examining the Data
The data clearly shows that tech layoffs hit rock bottom in September 2023. During that month, Layoffs.FYI only recorded a total of 4,707 cuts from 65 known companies. However, as we approached the end of the year, the numbers started to climb again, with over 8,000 reported layoffs in November and 7,000 in December. This was from a smaller number of known companies, with only 72 and 56 making the cuts, respectively.
The plural of anecdotes is not data, so we need to look at historical trends to put these layoffs into context.
Overall, the increase in tech layoffs is a concerning trend that we cannot ignore. It begs the question, why are these companies resorting to such drastic measures? Stay tuned for our next update where we dive deeper into the possible reasons behind the wave of layoffs in the tech industry.
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Let’s remember that the plural of anecdotes is not data. It’s important to rely on data and historical trends to truly understand the situation. Layoffs.FYI is a great resource for tracking these trends and The Exchange is committed to bringing you updates on startups, markets, and money every week. So keep an eye out for our next article!
