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Substack and Unity join the growing list of tech layoffs

The tech sector has been hit especially hard as the economy has shifted in recent months, with over 15,000 layoffs in June alone.

Substack and Unity join the growing list of tech layoffs
[Photo: pfb1/Getty Images]

Two weeks ago, Unity Technologies CEO John Riccitiello reassured his staff that the video game software-development company had no plans to lay anyone off. On Thursday, several hundred people found out firsthand that plans had apparently changed.

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Unity has laid off 4% of its workforce, between 200 and 300 employees, as part of a realignment. In an effort to explain the move, a company spokesperson told Fast Company: “As part of a continued planning process where we regularly assess our resourcing levels against our company priorities, we decided to realign some of our resources to better drive focus and support our long-term growth.”

Unity is just the latest in a series of layoffs that have plagued the tech sector in recent weeks. Substack, on Wednesday, eliminated 13 positions (that’s 14% of its workforce)—again, not long after its CEO vowed not to cut staff.

“I’m very sorry,” wrote Substack cofounder and CEO Chris Best in an email to staff. “Not so long ago, I told you all that our plan was to grow the team and not do layoffs. . . . We did not make this decision lightly.”

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Substack has been struggling to become profitable in a weak economy after pausing fundraising efforts earlier this year. Compounding matters, venture capitalists have been more reticent to fund tech companies, given spiking interest rates and fears of a looming recession.

Also shedding staff was Niantic, the company behind Pokemon Go, which laid off nearly 90 people Wednesday (roughly 8% of its staff), and reportedly stopped production on four projects.

The tech sector has been hit especially hard as the economy has shifted in recent months. Over 16,000 tech workers lost their jobs in May. And June has seen nearly 15,000 cuts, with 166 companies trimming their payroll, according to data sourced from tracking tool Layoffs.fyi.

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Other recent layoffs include:

  • HomeLight: The real estate company laid off 19% of its workforce Wednesday, noting the fast-changing housing market and the need to grow in a “sustainable way.”
  • Sundae: The San Francisco-based company that pairs home sellers with investors laid off 15% of its staff Tuesday, “to ensure [the company] is around for decades to come. That comes as Sundae is reportedly close to an $80 million fundraising round, which could prompt the company to begin hiring again.
  • Qumulo: Roughly 80 employees of this Seattle data-storage provider startup were cut Thursday, due to economic conditions and profitability concerns. Qumulo is one of the rare number of “unicorns” in Seattle, with a valuation topping $1 billion.

The bad news doesn’t look to be slowing down anytime soon for tech companies. Cryptocurrencies continue to plummet to levels not seen since 2020, and Wall Street will wrap up the first half of the year with the S&P 500 turning in its worst six-month performance since 1970. Inflation also isn’t abating, meaning more shake-ups could be on the way.

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About the author

Chris Morris is a veteran journalist with more than 30 years of experience. Learn more at chrismorrisjournalist.com.

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