Joseph F. Kovar
A look at the layoffs that have hit some big tech companies and startups in recent months — from Oracle and Intel to Avaya, Meta and Cybereason.
Layoffs at a time when tech talent is scarce
Since the start of the recovery from the COVID-19 pandemic, the United States has found itself in an increasingly tight labor market with an official US unemployment rate of 3.7% in October. But with interest rates rising and spending cooling amid rising prices, companies have begun to halt hiring and even cut payrolls.
The second half of 2022 has been characterized by a series of tech layoffs, with companies from small businesses to multinational giants laying off significant numbers of employees. In fact, layoff tracking website Layoffs.fyi reports that more than 100,000 tech workers were laid off in 2022. And that number is likely to rise.
[Related: Economic Outlook For 2023: 10 Tech Execs Weigh In]
Douglas Holtz-Eakin, the former director of the U.S. Congressional Budget Office, told a crowd at CRN’s parent company’s XChange Best of Breed 2022 conference in October that he expects a Modest recession hits in mid-2023 due to Federal Reserve rate hike, continued inflation and upcoming uncertainty with China as well as Russia’s war in Ukraine.
The impact was first felt more in the cybersecurity industry than in technology as a whole, with a host of startups and some mature cybersecurity companies being laid off in recent months. But those initial layoffs spread to other tech companies as soon as the fall season began.
Mark Hatfield, founder and general partner of Ten Eleven Ventures, told CRN in May that cybersecurity remains a solid long-term bet for investors, but acknowledged that cybersecurity startup valuations have peaked and are falling. .
Meanwhile, a new report from Progress Partners, a Boston-based investment bank, said the amount of venture capital funds invested in cybersecurity companies fell in the third quarter compared to the same period the last year, from $5.6 billion to $3.3 billion, or 41 percent.
The pullback comes amid an uncertain economic backdrop, with market swings, high inflation and predictions of a coming recession dominating recent headlines.
Progress Partners’ venture capital outlook generally confirms what other analysts see: a slowdown in early-stage cybersecurity dollar investment, but an increase in deals.
CRN examined the layoff activities of 23 information technology companies during the second half of 2022. This industry review focuses on companies focused on building the hardware, software, tools and services that power the computer industry or are used by computer professionals.
To review a sample of the tech companies that have laid off workers in recent months, click through the slideshow.
Jay Fitzgerald, Wade Millward, Gina Narcisi, Mark Haranas, David Harris, O’Ryan Johnson and CJ Fairfield all contributed to this article.
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