Layoffs are making headlines again, but they’re focused on one sector: technology. According to his Layoffs.fyi, which tracks layoffs in the tech industry, those numbers are skyrocketing, with November’s tolls three times higher than his October’s.
In fact, since early 2022, more tech workers have been laid off than in 2020 and 2021 combined.
These layoffs are otherwise strong employment environment: Employers added more jobs than expected in October, according to Bureau of Labor Statistics data. The unemployment rate has hovered between 3.5% and 3.7% since April, according to the agency’s data. And according to the Federal Reserve Bank of St. Louis, this year’s turnover rate is consistently among the highest in more than 20 years, reflecting employee trust.
Job hunting is generally going well. But when job cuts are taking place in the hottest areas on the internet, you’ll hear about it.
What’s happening with tech layoffs?
maximum technology dismissal Prominent companies like Twitter laid off about half of their staff shortly after Elon Musk took over. Then, on Nov. 16, Musk gave his employees an ultimatum to commit to the new “hardcore” Twitter or leave. More than 1,200 employees reportedly chose the latter.
On November 9, Meta, which owns Facebook and Instagram, laid off more than 11,000 employees. This represents about 13% of our workforce.
On November 15th, Amazon began laying off employees, reporting a goal of cutting 10,000 employees. That’s about 3% of company employees and less than 1% of his hourly workers.
A myriad of big names have followed suit, including crypto (Coinbase), e-commerce (Shopify), ridesharing (Lyft), online payments (Stripe), work management platforms (Asana), online real estate brokers (Redfin). It is the largest name in computer software (Microsoft) without. The list goes on and on.
873 as of November 29th. This figure is thanks to Roger Lee, the creator of his Layoffs.fyi, which has been tracking layoffs in the tech industry since 2020. What’s happening in the tech industry today is different than it was years ago. Lee responded to the question by email.
Nerd Wallet: When and why did you start tracking tech layoffs?
Roger Lee: When COVID-19 became a pandemic in early 2020, I (and others) found it leading to a spike in startup layoffs. At the same time, I also knew that there were many tech companies (such as Human Interest, which I co-founded seven years before him) that were still in a fortunate position to stay employed.
I started Layoffs.fyi as a side project to raise awareness about all these technology layoffs. This is because he wants to help a laid-off employee find a home at one of the startups he’s lucky enough to keep hiring. I’ve found the site to be a useful resource for the tech community in general as well.
Northwest: Do you think layoffs will come before the general public like tips sent in by tech workers?
RL: yes. However, the website only adds layoffs that have been confirmed in some way (e.g. reported by the media, announced by the company, etc.).
Northwest: I am thinking about the list of laid off employees. I also wonder who counts as a technology worker. Is it just everyone who works for a tech company, even if they’re in non-tech related service roles?
Northwest: What are the parameters for including companies?
RL: Must be a technology company. The data set is also skewed toward more modern companies (that is, companies founded within the last 20 years).
Northwest: Your tracker shows layoffs over time, very informative. In 2022 alone, more than 121,000 tech workers were laid off. This is more laid off workers than in 2020 and 2021 combined (95,991). What has happened this year compared to last year when layoffs were common in the tech industry?
RL: There are far more people working in tech today than there will be in 2020 or 2021 (and therefore more employees likely to be laid off).
In late 2020 and into 2021, tech companies continued to hire large numbers of people as people turned to technology to work, shop, and socialize. The Fed’s accommodative monetary policy has also enabled tech companies to raise capital and invest in growth.
Both of these trends have sharply reversed in 2022. Faced with slowing growth and an overall economic downturn, tech companies are cutting headcount as they realize over-hiring in recent years.
Technician layoffs will stop when, and only then, it becomes clear that the Federal Reserve can slow inflation.
Roger Lee | Layoffs.fyi Founder
Northwest: Is Twitter an outlier? My point is, is the reason Twitter ultimately cut its workforce by more than half, most clearly and unequivocally, due to Elon Musk’s more “hardcore” approach to managing? The company was already headed for layoffs due to the downturn, but has Musk accelerated it?
RL: It’s a bit of both. Twitter faces many of the same challenges that all tech companies face in the current environment, but its unique circumstances may have made layoffs more serious than they otherwise would have been.
Northwest: Trackers show a particular spike in November, especially in the number of laid-off employees. Is this primarily due to recent events on Meta and Twitter, or are the wounds more widespread?
November was the worst month so far in 2022 (45,000 tech workers were laid off, which is more than three times as many as in October).
RL: Meta, Twitter, Salesforce, and Cisco account for 19,000 of these employees.
Northwest: Headcount cuts at large companies seem like the perfect opportunity for start-ups to tap into the newly created pool. Or are the startup economy itself in a slump due to rising interest rates, with heavily-losing VCs tightening their belts?
RL: For startups that are lucky enough to keep hiring, layoffs at Big Tech present a once-in-a-lifetime opportunity to hire top talent that has never been available before.
That said, many startups struggle alongside larger tech companies. In fact, earlier this year, almost all of the layoffs were from start-ups. It’s only recently that layoffs have started to affect big tech companies as well.
Northwest: What, if anything, do you think could be done to reverse these trends?
RL: Technician layoffs will stop when, and only then, it becomes clear that the Federal Reserve can slow inflation.