The tech sector’s massive cost-cutting mission doesn’t appear to be slowing anytime soon.
Once high-flying companies, with unprecedented valuations and growth-at-all-costs strategies, have started to scale back, as the economy appears to be heading for a slowdown. The efforts, which started in May, have resulted in massive layoffs at several firms, from startups to publicly traded companies worth billions of dollars.
The layoffs in the sector are happening for a variety reasons. But it’s clear that the market is in an entirely different place than it was in 2021, when dealmaking was happening at a rapid pace, and investors were jumping head first into funding rounds with sky-high valuations. Several venture capitalists and private equity firms, for example, have been warning their portfolio companies to preserve cash and look for ways they can cut costs. Oftentimes, that comes in the form of hiring freezes or job cuts.
Fast Company is compiling an ongoing list of tech companies that have announced layoffs recently:
Peloton told employees August 12 that it was cutting 784 jobs as the connected fitness maker continues to struggle to rebound to its pandemic highs. The layoffs will impact employees across its distribution and customer service teams. The company is also planning to shutter some of its retail operations, in an effort to “balance” e-commerce and retail. “These changes are essential if Peloton is ever going to become cash flow positive. Cash is oxygen. Oxygen is life. We simply must become self-sustaining on a cash flow basis,” Peloton CEO Barry McCarthy wrote in a memo to employees.
Calm, the company behind the eponymous meditation app, laid off 20% of its staff on August 11. The move, first reported by The Wall Street Journal, would affect about 90 employees. Calm CEO David Ko told employees in a memo that the company’s leadership had “revisited the investment thesis behind every project” before it made changes that would help “prioritize the future, focus on growth and become a more efficient organization.”
On August 8, Groupon laid off over 500 employees—or roughly 15% of its 3,416-person workforce. The cuts came in merchant development, sales, recruiting, engineering, product and marketing. In a letter to staff, CEO Kedar Deshpande said the shake-ups will allow Groupon to focus “only on mission-critical activities,” and admitted the company will now be “leaning on more external support.”
The Utah-based online ticketing giant announced in early August it would be shuttering its San Francisco and Shanghai offices. CEO Eric Baker said “the majority of our employees in both locations” would lose their jobs; according to The Real Deal, both offices have in total around 160 employees.
Beyond announced August 4 it would lay off 40 people (4% of its global workforce), saying inflation has dampened consumer demand for the company’s plant-based meat substitutes. CEO Ethan Brown told the Wall Street Journal that Beyond’s plant-based ground beef recently sold for about $8 a pound, compared to $5 a pound for real meat. “That is a very difficult proposition when consumers have very high levels of inflation going on,” he said.
SoundCloud CEO Michael Weissman sent a memo to employees on August 3 saying that the company would lay off around 20% of its workforce, as first reported by Billboard. “Today’s change positions SoundCloud for the long run and puts us on a path to sustained profitability,” Weissman wrote in the email. “We have already begun to make prudent financial decisions across the company and that now extends to a reduction to our team.”
Robinhood CEO Vlad Tenev announced in a press release on August 2 that the company would lay off about 23% of its staff, mostly in operations, marketing and program management. Tenev blamed the cuts on high inflation and the crypto market crash, both of which have “further reduced customer trading activity and assets under custody,” he wrote in the memo. Robinhood had already laid off 9% of its workforce in April, a move that Tenev acknowledged “did not go far enough.”
Oracle is among the latest tech firms to announce widespread layoffs. The Information reported on August 1 that the company has laid off an unspecified number of U.S. workers, with plans in the coming months to lay off some in Canada, India, and parts of Europe, which would equate to “thousands.” A spokesperson didn’t immediately respond to Fast Company‘s request for comment. However, several LinkedIn users, who listed their employment as Oracle, took to the social media platform to share they were part of the layoffs and were looking for new work.
In July, Shopify laid off roughly 10% of its workforce, or about 1,000 workers. CEO Tobi Lütke told employees at the time that he overestimated how long the e-commerce pandemic boom would last, expecting that the adaptation of online shopping would have permanently jumped ahead by 5 to 10 years.
The the electric vehicle startup announced in July cuts to about 6% of its workforce (some 840 positions), citing concerns over rising interest rates, inflation, and increased commodity prices. “To fully realize our potential, our strategy must support our sustainable growth as we ramp towards profitability,” CEO RJ Scaringe wrote in a memo to employees announcing the layoffs.
Lyft cut about 60 jobs in its rental division in July in an attempt to reorganize the business amid rising costs. The company also said it would discontinue its service where it offered its cars for long-term rentals.
Netflix laid off 300 employees in June, after the company reported that it had lost subscribers for the first time in more than a decade, and slowing revenue growth. Netflix, in an attempt to remedy the decline, said it was going to be rolling out an ad-supported tier in order to draw in more subscribers.
Coinbase told employees in June that the cryptocurrency exchange was reducing its headcount by about 18% ahead of the economic downturn. “While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment,” CEO Brian Armstrong told employees.