Updated: June 28, 2022 at 7:40 p.m. E.T.
What goes up must come down.
High-flying startups with record valuations, huge hiring goals and ambitious expansion plans are now announcing hiring slowdowns, freezes and in some cases widespread layoffs. It’s the dot-com bust all over again — this time, without the cute sock puppet and in the midst of a global pandemic we just can’t seem to shake.
Founders and investors are preparing for what looks like an economic downturn — and perhaps even a recession. In May, Y Combinator sent an email to its portfolio founders warning them to “plan for the worst.” The startup accelerator cautioned that the downturn would likely most affect “international companies, asset heavy companies, low margin companies, hardtech, and other companies with high burn and long time to revenue."
It’s not just early-stage startups that are feeling the burn. Big tech companies including Meta, Salesforce and Netflix have also recently announced hiring freezes or layoffs in the midst of cost-cutting pressure and rising inflation, coupled with a looming bear market and rising interest rates. Industry stalwarts (Microsoft), upstart social media companies (Snap) and crypto newbies (Coinbase) haven’t announced layoffs, but they’ve all slowed hiring after poor quarterly results. By late May, the S&P 500, dominated by tech stocks, had lost over 20% of its value since the beginning of the year.
On Blind, speculative posts about layoffs like one called “Layoff safe companies that are still hiring?” have drawn hundreds of comments. One user wrote, “No company is lay-off safe. You need to make yourself lay-off safe. Get some seniority and work hard to make yourself irreplaceable. Or at least a strong contributor.”
The bright spot? The tech industry may be under siege, but American job seekers overall still have substantial bargaining power. What we’re seeing in one sector — though a substantial one — stands in stark contrast to the rest of the economy, with U.S. employers adding 428,000 jobs in April, more than expected, according to Bureau of Labor Statistics data. Average hourly wages are also still continuing to grow (but still below the pace of inflation).
Tech companies that have laid off employees in 2022
Layoffs range from the small-scale to, in the worst cases, mass layoffs conducted via impersonal video messages that have left employees gutted and the industry questioning, “Are Zoom layoffs ever OK?” In mid-May, former Employment Development Department director Michael Bernick told KTVU that tech layoffs were at their highest point since January 2021, and they’ve come for both the giants and startups. A crowdsourced tech startup layoffs tracker, Layoffs.fyi, recorded 60 tech companies with layoffs in the last month or so, with more than 16,000 employees laid off. Some of the companies that have cut staff in the last few weeks include nutrition startup Noom, on-demand grocery delivery service Getir and fintech company Bolt, according to Layoffs.fyi.
Cybersecurity firm Lacework laid off 20% of its workforce. Though it didn’t disclose the number of people this would affect, the company had previously reported having more than 1,000 employees as of March 2022. Lacework said in a blog post that the decision was part of “restructuring and modification to the company plan." Cybersecurity professionals have been in high demand, with companies like Microsoft announcing plans to help with reskilling efforts to account for the widening gap in jobs and those with the knowledge to fill them.
On-demand grocery app Gorillas cut half its corporate staff, or about 300 employees around the world. In a message to staff, Gorillas co-founder and CEO Kagan Sumer said: "Two months ago in March, the markets turned upside down, and since then the situation has continued to worsen.”
Just weeks after laying off more than 80 employees at its San Jose headquarters, PayPal let go of additional employees in risk management and operations in Chicago, Nebraska and Arizona.
Maju Kuruvilla, the CEO of payments company Bolt, told employees that the company is undergoing “several structural changes,” and cut more than 100 staff members in order to “secure [Bolt’s] financial position” amid shaky market conditions.
Online used car dealer Carvana laid off 2,500 employees, many of them over Zoom. The laid-off employees mostly served in operational roles and made up about 12% of the company’s workforce. Carvana said the decision was due to “macroeconomic factors” that “have pushed automotive retail into recession.”
Several employees at collaboration tool startup Mural were let go, according to LinkedIn posts from affected employees. The exact number of employees laid off was not reported. Leah Taylor, a spokesperson for Mural, told Protocol that staffing reductions were “focused on redundancies.”
Productivity app ClickUp laid off 7% of its staff in an unexpected move. CEO Zeb Evans told Protocol the goal was to ensure ClickUp’s profitability and efficiency in the future, saying it puts the company “in a position to accelerate our timeline to profitability and ultimately achieve our goal of going public.”
"Buy now, pay later" company Klarna laid off 10% of its workforce as it has reportedly been looking for more funding, potentially at a lower valuation. Klarna has about 5,000 employees, according to website. In a prerecorded message to the entire staff, Klarna CEO Sebastian Siemiatkowski said the company set its business plans last year in “a very different world than the one we are in today.”
Celebrity video greetings startup Cameo laid off 87 staff members, affecting some of Cameo’s most senior executives, including CTO Rob Post, top marketing executive Emily Boschwitz, CPO Nundu Janakiram and Chief People Officer Melanie Steinbach. CEO Steven Galanis pointed to pandemic-fueled hiring as a reason for the cuts, as “market conditions have rapidly changed.”
Trading app Robinhood laid off roughly 9% of its full-time workforce. Following a period of "hypergrowth," the company cut down on duplicate roles and job functions as a way to mitigate "more layers and complexity than are optimal," CEO Vlad Tenev said in a blog post. The decision affected roughly 340 Robinhood employees.
Netflix first laid off a number of journalists working for the company’s entertainment site Tudum in late April. Weeks later, the company laid off an additional 150 employees, then cut an additional 300 a month after that. Following the company’s less-than-stellar Q1 earnings report, Netflix CFO Spencer Neumann said that the company would be pulling back on some of its spending to get costs under control.
Enterprise video messaging company Loom laid off 34 employees across product and operations teams, representing 14% of its staff, according to TechCrunch. In a statement, CEO Joe Thomas said that the decision was made in order to ensure that the company is able to "move forward sustainably."
Gemini, the crypto exchange run by brothers Cameron and Tyler Winklevoss, is cutting 10% of its staff. Gemini did not disclose how many total jobs were cut, but the company employs just over 1,000 people. The Winklevoss brothers said in a memo to staff that the crypto industry is "in the contraction phase that is settling into a period of stasis."
Cybersecurity firm Cybereason disclosed layoffs affecting 100 employees, or about 10% of its staff, the company told Protocol. Venture-backed Cybereason cited its inability to go public in the near term as the driver for the cutbacks. With the tech IPO market now “essentially closed, companies like us must now exercise more strict financial discipline,” the company said in a statement.
Social media startup IRL laid off around 20 employees, The Information reported. The company is backed by SoftBank, and had around 100 employees prior to layoffs.
Insurtech company Policygenius laid off 25% of its staff, according to TechCrunch. Though the number of affected employees was not confirmed, reportedly 170 were laid off. The company had raised $125 million in Series E funding in March. CEO Jennifer Fitzgerald said in a statement that the "sudden and dramatic shift in the economy has forced us to adapt our strategy."
Tesla is cutting about 10% of salaried workers. Almost 100,000 people work at Tesla and its subsidiaries, according to an SEC filing late last year, meaning 10,000 employees could lose their jobs. Musk told fellow executives he had a "super bad feeling" about the economy, and told CNBC that the company has "become overstaffed in many areas." The layoffs don't apply to anyone "actually building cars," said Musk, and follows the CEO calling both Tesla and SpaceX employees back to the office for 40 hours a week. The company then reportedly laid off around 200 employees on its Autopilot team.
British online used car dealer Cazoo is cutting 15% of its staff amid the rising risk of a recession in the U.K., the company said. Cazoo employs around 3,500 people.
Scooter startup Bird is slashing 23% of its staff, affecting a range of positions from new hires to senior staff. Bird told TechCrunch that "macro economic trends impacting everyone have resulted in an acceleration of our path to profitability." Bird has around 600 employees.
Security software company OneTrust is laying off 25% of its staff, affecting around 950 employees. CEO Kabir Barday said in a blog post the move was a response to the shift in sentiment in the capital markets.
BlockFi is cutting 20% of its staff. The crypto lender said it must respond to a "dramatic shift in macroeconomic conditions worldwide." The company has a head count of around 850, meaning the layoffs will affect roughly 170 staff members.
Coinbase is laying off 18% of its staff "to ensure we stay healthy during this economic downturn," CEO Brian Armstrong said. The company first slowed, then froze hiring and rescinded offers as it looked to "reprioritize our hiring needs against our highest-priority business goals," COO Emilie Choi said. The company later created a database of laid-off employees to help them find new work.
Real estate tech company Redfin is laying off about 470 employees, TechCrunch reported. The company cited low demand for home buying as mortgage interest rates surge.
Real estate company Compass is laying off 10% of its staff, or about 450 people. A company spokesperson told TechCrunch that the staffing cuts are due to "clear signals of slowing economic growth."
Online notarization company Notarize laid off 110 employees, or 25% of staff, the Boston Business Journal reported. The cuts trimmed its workforce down to 325 employees.
Celebrity education tech platform MasterClass cut 20% of its staff, or around 120 employees. The company said the move would "strengthen our position both financially and strategically."
Investment firm Backstage Capital, which funds startups led by underrepresented founders, cut all of its operation staff due to fundraising challenges, according to its founder Arlan Hamilton. The firm cut 75% of its staff, going from a dozen employees to three. It is still seeking to raise a $30 million opportunity fund.
Fintech company Amount, which reached a valuation of more than $1 billion last year, laid off 18% of its workforce. CEO Adam Hughes blamed "the current macro-economic environment." The company did not say the number of employees affected.
Tech companies that have slowed or frozen hiring
Though major companies haven’t had to make drastic cuts, several are slowing down or freezing hiring, citing disappointing earnings and a battered tech sector, but continue to reassure staff that job cuts aren’t imminent. A lot of these hiring slowdowns, like at Microsoft, are contained to specific departments rather than companywide.
Microsoft slowed hiring for its Windows, Office and Teams software groups. The slowdown is specific to those teams, as they've expanded recently. A spokesperson for the company told Bloomberg that Microsoft is “making sure the right resources are aligned to the right opportunity” as the new fiscal year approaches.
Nvidia will slow hiring later this year, the company said in its latest earnings call. Nvidia told Protocol that the move is "to focus our budget on taking care of existing employees as inflation persists.”
Lyft is slowing hiring to focus on critical open roles. President John Zimmer told staff in a memo that the company would be cutting costs in response to "an economic slowdown and the dramatic change in investor sentiment."
After struggling to meet earnings estimates, Snap announced that it would hit the brakes on hiring through the end of the year. Snap CEO Evan Spiegel denied both layoffs and a hiring freeze. The company pointed to a few reasons for the slowdown: rising inflation, rising interest rates, supply chain, the war in Ukraine and Apple’s new ad-tracking policies.
Uber is cutting back on hiring and other costs to address a "seismic shift" in the market, according to an email that CEO Dara Khosrowshahi sent to staff. Khosrowshahi said hiring should be treated as a "privilege,” and that the company would scale back on the "least efficient" marketing and incentive costs.
Per an internal memo, Salesforce slowed hiring and cut back on other expenses, including corporate travel and some upcoming off-sites. The company didn’t provide a reason for the cutbacks. Salesforce’s stock price has plunged almost 50% in the last six months.
Meta is perhaps the biggest company to have announced a hiring freeze for certain roles as it works to control its spending amid an “industry-wide downturn.” Mark Zuckerberg assured employees at an internal all-hands that job cuts aren’t planned. The hiring cutbacks will hit “almost every team across the company" and will last for the rest of the year.
CEO Parag Agrawal announced in a memo that it would freeze hiring and pull back spending. Two key leaders, Kayvon Beykpour and Bruce Falck left the company. Agrawal said the company made these decisions after struggling to meet audience and revenue growth goals, though the company has faced some internal turmoil amid Elon Musk’s takeover deal. It’s also been reported that Twitter has even started rescinding job offers.
Intel is freezing hiring for at least two weeks in its division responsible for desktop and laptop chips, according to Reuters. The company is "pausing all hiring and placing all job requisitions on hold" for the divisions with the goal of cutting down costs. The company is doing this while it reevaluates its hiring priorities, but all current job offers will be honored.
Spotify CEO Daniel Ek said in an email to employees that it would slow its hiring targets by 25%. Prior to this, CFO Paul Vogel said at the company’s investor day that it is "clearly aware of the increasing uncertainty regarding the global economy" and would evaluate head count in the near term.
This story was updated on May 31, 2022 to correct the audience of Klarna's prerecorded message.