Tech

Tech companies laid off more than 7,000 workers this week

Is this trend simply a course-correction, or the start of something worse?
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· 3 min read

We didn’t want to be covering layoffs again, particularly going into Memorial Day weekend. Truly, the last thing we’d like to discuss is people losing their livelihoods and benefits—it’s not exactly the fun-in-the-sun send-off we’d hope to give readers—but the market factors we discussed last week continue to hammer the industry, prompting more layoffs and hiring freezes.

In the past week, at least 16 tech companies worldwide have laid off more than 7,200 employees, according to layoffs.fyi, a site dedicated to tracking tech layoffs since March 2020. Some of the most notable include:

Klarna’s got a message for staff. Business Insider reported that the buy now, pay later service announced on Monday plans to lay off 10% of its global staff, or 700 employees, through a prerecorded video.

CEO and co-founder Sebastian Siemiatkowski said in a message to staff that some time in the next several days, “impacted” employees would find a calendar invite titled “Meeting regarding your role at Klarna” landing in their inboxes.

Siemiatkowski cited the war in Ukraine, shifts in consumer sentiment, and “a steep increase in inflation, a highly volatile stock market, and a likely recession” as factors in the decision to lay employees off.

Part ways for later payday. When ClickUp, a productivity platform, and Latch, a smart-lock company, laid off employees, leadership framed the moves in a somewhat positive light.

TechCrunch reported that Latch CEO Luke Schoenfelder told staff by email that the layoffs—which will last two consecutive weeks—will “ensure Latch is on a path to sustainable growth.”

Zeb Evans, CEO of ClickUp, similarly told Protocol that the decision to lay off 7% of the company would “accelerate our timeline to profitability.” He stressed that the layoffs were not an indication of what’s to come. “We are by no means slowing down or pausing hiring, as we plan to hire 250 people this year and 300 more next year,” Evans told Protocol.

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Bolt did both. The New York Times reported that the CEO of the online payments startup, Maju Kuruvilla, announced impending layoffs on Wednesday afternoon through a company-wide email. In Kuruvilla’s message, he focused on how the layoffs would enable Bolt to extend their “financial position, extend our runway, and reach profitability with the money we have already raised.” He did not disclose which departments were impacted; instead, workers discovered they were let go through a calendar invite titled “Bolt Restructuring.” Remaining Bolt employees learned the total number of layoffs, around 240, by watching coworkers be removed from company Slack channels.

What’s next? Some experts warn that the sector will remain rocky, including Uber CEO Dara Khosrowshahi, who told staffers in an email that younger employees have enjoyed “a long and unprecedented bull run. This next period will be different.”

Others suspect the layoffs are a necessary course-correction.

Sarah Kunst, founder of venture firm Cleo Capital told the Washington Post that “hiring got really out of control and work didn’t really change in a meaningful way during Covid, so I wonder how much of this is big companies using the macro softness to clean house.”—SV

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