We’re kicking off November on a bleak note.
Usually when I update the Crunchbase layoffs tracker, I see around 1,000 layoffs a week. But since I updated it last Friday, 23 companies have laid off more than 7,000 people. That puts our tally at more than 52,700 layoffs this year.
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That means around 15% of the layoffs that happened so far this year happened in just one week.
Another round of layoffs
But even if we ignore what might be an anomaly, the truth is that layoffs might get worse this winter as companies start conducting their second and even third rounds of layoffs. We’re already seeing this — Stripe cut around 1,000 people this week after laying off around 50 people in October, per Crunchbase data. Lyft slashed 700 folks from its team after laying off 60 people in July.
Last week, mental health startup Cerebral cut 400 people (20% of its staff) after an earlier round of layoffs in May. Gopuff, a food delivery service company, laid off 2,200 people in a series of three layoffs this year, the most recent being around 250 employees.
Are you seeing a pattern? After an uncertain market that led to sparse layoffs in the summer, companies are seeing the writing on the wall and cutting their numbers by the hundreds.
Undeniable market conditions
“I think what you may see is that companies that really thought that they were going to be able to raise that next round at a good valuation, may suddenly meet the market and realize that it’s not as easy or the valuation isn’t there,” Healy Jones, an executive at the startup consulting firm Kruze Consulting, told me back in September.
It looks like he’s right. CEOs at Gem (a recruiting platform), Opendoor (a proptech startup) and Shippo (which focuses on logistics) all cited the frosty market conditions that led to layoffs in their respective public letters. All this goes to show that layoffs are penetrating every niche in the tech industry without discrimination.
Large companies are not immune. Amazon announced it would pause hiring, and Apple said it would only prioritize hiring in its research and development arm.
“If you’re talking about a software company, the primary expense is personnel,” Jones said. “They probably don’t even have any real rent right now.”
Illustration: Dom Guzman
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Author: Keerthi Vedantam