Startups

Yes, the tech layoff surge you are feeling is real

Comment

Illustration with large scissors cutting strings attached to a group of employees to symbolize layoffs or job cuts.
Image Credits: mathisworks / Getty Images

Tech layoffs are accelerating, according to the data. The surge in staff cuts comes after reductions in human capital slowed so much in the back half of 2023 that we wrote that “tech layoffs are all but a thing of the past.” At the time, reported layoffs had been trending down for months and months to reach what appeared to be a nadir that was so low it felt inconsequential.

How things have changed. At the time, we posited that rising tech valuations were taking some pressure off technology concerns and that large-scale cuts appeared to be losing luster compared to more targeted reductions in total staffing. Then 2024 rolled around and flipped the script.


The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.


The recent wave of layoffs has hit tech shops big and small. Veho, a package delivery company, cut 65 people this week, or about one-fifth of its total headcount. After quick revenue growth in 2023, midsized tech companies are cutting as well. Brex’s latest layoffs make it plain that even some of the best-known, and most richly funded, upstart tech companies are finding their headcount to be too much. And the majors are cutting as well, with Microsoft axing 1,900 workers yesterday, and Google planning more cuts throughout the year. In the latter case, staggered layoffs are a great way to tell workers to quit, so expect total attrition at the search giant to outstrip forced exits.

The plural of anecdotes is not data, so we need to to look at historical trends to put these layoffs into context. Thankfully, that information is at our fingertips and we can report that, yes, the layoff surge that you are feeling is in fact an actual wave. Let’s dig into how sharply tech companies are ripping humans out of their businesses, and our working hypotheses as to why the cuts are coming with such frequency and depth.

Looking at the data

Tech layoffs bottomed out in September 2023. In that month, Layoffs.FYI counted just 4,707 tech layoffs across 65 total known cuts. Those figures rose throughout the final months of the year, reaching just over 8,000 in November, and 7,000 in December, resulting from 72 and 56 known cuts, respectively.

Subscribe to TechCrunch+

Then 2024 kicked off. January has thus far seen 23,670 known tech layoffs, sourced from 85 known reductions. Not only are we seeing more companies cutting thus far in January, but the reductions are also larger in scale. More and bigger cuts means one thing: Tech layoffs are once again accelerating — and rapidly.

What’s going on?

The current layoff wave is not single-factorial.

The shift to AI is one of the hypotheses as to why even hugely profitable tech giants are laying off staff. In that scenario, they would simply be redirecting resources in the direction they most believe in. More AI, less creator management, etc. And that means that staff in less favored areas of business could find themselves outside and in the cold.

https://techcrunch.com/2024/01/25/tech-layoffs-2023-list/?utm_source=internal&utm_medium=WPunit

That tech as a whole is more bullish about AI than pretty much anything else is a story we have already seen play out in venture capital, so we can easily believe it. But when it comes to layoffs, it seems that there’s more at play, and some of these other factors are more worrying.

For all the talk about slowing inflation, and the policies that should ensue, not much has changed on the macro front in recent months. ZIRP days are behind us, that’s for sure, but even the moderate rate cuts that many are hoping to manifest in short order are taking their time. If tech companies are taking their cues from central banks, sticky and high rates are another incentive to rein in their enthusiasm and spending for 2024.

There’s also the question of bloat, with all respect possible as we are talking about people. But having witnessed 2021, we also know that tech companies hired liberally over that period, without always having a clear picture of how they would use that talent. When winter comes, it is no surprise that they realize they could do more with less. That the cuts are still happening at their current level is a surprise, but some trends last longer than you expect.

Arguably, maybe they also grasp that they don’t want to do more. There’s always the risk for tech companies to do too much and not do it well. With intense competition coming up on the AI front, perhaps tech giants and startups are starting to take in that they need to get this right; the sooner, the better.

Other hypotheses occupy our brains. The evolution of major tech companies to MBA-run shops that prioritize near-term financial results over long-term innovation is one. That’s what layoffs at Google’s skunkworks division sound like to our ears, for example.

For tech workers, the landscape is clear: No matter what company you’re at, no matter what industry it targets, your role is not safe. Keep that résumé up-to-date, lest you find yourself unprepared and unemployed at the same time.

More TechCrunch

Featured Article

UK’s Zapp EV plans to expand globally with an early start in India

Zapp is launching its urban electric two-wheeler in India in 2025 as it plans to expand globally.

UK’s Zapp EV plans to expand globally with an early start in India

The first time I saw Google’s latest commercial, I wondered, “Is it just me, or is this kind of bad?” By the fourth or fifth time I saw it, I’d…

Dear Google, who wants an AI-written fan letter?

Featured Article

MatPat, the first big YouTuber to successfully exit his company, is lobbying for creators on Capitol Hill

Though MatPat retired from YouTube, he’s still pretty busy. In fact, he’s been spending a lot of time on Capitol Hill.

MatPat, the first big YouTuber to successfully exit his company, is lobbying for creators on Capitol Hill

Featured Article

A tale of two foldables

Samsung is still foldables’ 500-pound gorilla, but the company successes have made the category significantly less lonely in recent years.

A tale of two foldables

The California Department of Motor Vehicles this week granted Nuro approval to test its third-generation R3 autonomous delivery vehicle in four Bay Area cities, giving the AV startup a positive…

Autonomous delivery startup Nuro is gearing up for a comeback

With Ghostery turning 15 years old this month, TechCrunch caught up with CEO Jean-Paul Schmetz to discuss the company’s strategy and the state of ad tracking.

Ghostery’s CEO says regulation won’t save us from ad trackers

Two years ago, workers at an Apple Store in Towson, Maryland were the first to establish a formally recognized union at an Apple retail store in the United States. Now…

Apple reaches its first contract agreement with a US retail union

OpenAI is testing SearchGPT, a new AI search experience to compete directly with Google. The feature aims to elevate search queries with “timely answers” from across the internet and allows…

OpenAI comes for Google with SearchGPT

Indian cryptocurrency exchange WazirX announced on Saturday a controversial plan to “socialize” the $230 million loss from its recent security breach among all its customers, a move that has sent…

WazirX to ‘socialize’ $230 million security breach loss among customers

Featured Article

Stay up-to-date on the amount of venture dollars going to underrepresented founders

Stay up-to-date on the latest funding news for Black and women founders.

Stay up-to-date on the amount of venture dollars going to underrepresented founders

The National Institute of Standards and Technology (NIST), the U.S. Commerce Department agency that develops and tests tech for the U.S. government, companies and the broader public, has re-released a…

NIST releases a tool for testing AI model risk

Featured Article

Max Space reinvents expandable habitats with a 17th-century twist, launching in 2026

Max Space’s expandable habitats promise to be larger, stronger, and more versatile than anything like them ever launched, not to mention cheaper and lighter by far than a solid, machined structure.

Max Space reinvents expandable habitats with a 17th-century twist, launching in 2026

Payments giant Stripe has acquired a four-year-old competitor, Lemon Squeezy, the latter company announced Friday. Terms of the deal were not disclosed. As a merchant of record, Lemon Squeezy calculates…

Stripe acquires payment processing startup Lemon Squeezy

iCloud Private Relay has not been working for some Apple users across major markets, including the U.S., Europe, India and Japan.

Apple reports iCloud Private Relay global outages for some users

Welcome to Startups Weekly — your weekly recap of everything you can’t miss from the world of startups. To get Startups Weekly in your inbox every Friday, sign up here. This…

Legal tech, VC brawls and saying no to big offers

Apple joins 15 other tech companies — including Google, Meta, Microsoft and OpenAI — that committed to the White House’s rules for developing generative AI.

Apple signs the White House’s commitment to AI safety

The language is ambiguous, so it’s not clear whether X is helping itself to all user data for training Grok or whether this processing refers only to user interactions with…

Privacy watchdog says it’s ‘surprised’ by Elon Musk opting user data into Grok AI training

Sound Search on TikTok is somewhat similar to YouTube Music’s song detection tool that lets you find the name of a song by singing, humming or playing it. 

TikTok rolls out a new feature that lets you find songs by singing or humming them

Skip, a wearable tech startup that began as a secretive project inside Alphabet, exited stealth this week to announce a partnership with outdoor clothing specialist Arc’teryx. The deal is the…

Alphabet X spinoff partners with Arc’teryx to bring ‘everyday’ exoskeleton to market

Ledger, a French startup mostly known for its secure crypto hardware wallets, has launched a new mid-range device, the Ledger Flex. Available now, priced at $249, the dinky hardware wallet…

Ledger launches Ledger Flex, a mid-range hardware crypto wallet

The good news is that you can switch off the new data-sharing setting and also delete your conversation history with the AI. 

Here’s how to disable X (Twitter) from using your data to train its Grok AI

Regulators gave SpaceX the all-clear to return to launch two weeks after the Falcon 9 rocket experienced an anomaly on orbit.

SpaceX cleared to resume Falcon 9 launches while FAA investigation remains open

Madison Long and Simone May founded Clutch in 2020 to help connect people to businesses looking for marketing and content creation.

Digital marketing startup Plaiced has acquired Precursor Ventures-backed Clutch

With the CrowdStrike update continuing to cause havoc across the planet, a startup has raised $13.5 million to at least improve some level of security for the kinds of devices…

ZeroTier raises $13.5M to help avert CrowdStrike-like network problems

Apple has reduced prices of its iPhone models in India by 3-4% following a cut in import duties in the South Asian market.

Apple cuts iPhone price in India amid China slowdown

MNT-Halan, a fintech unicorn out of Egypt, is on a consolidation march. The microfinance and payments startup has raised $157.5 million in funding and is using the money in part…

Egypt’s MNT-Halan banks $157.5M, gobbles up a fintech in Turkey to expand

The energy transition is a marathon, not a sprint. But opportunities for acceleration are growing. Swedish startup Greenely* has just spotted one. It’s closing an €8 million Series A funding…

Energy tech startup Greenely grabs €8M to reach more households and support Europe’s energy transition

The Floorr offers tools for conducting sales, hosting tailored styling sessions, creating mood boards, and engaging in text or voice chats with clients, all in one place. 

Luxury fashion startup The Floorr empowers personal stylists with tools to grow their businesses

A decade-old drama involving VC David Sacks and Rippling founder Parker Conrad has blown up on X with many among the Silicon Valley elite taking sides.

Here’s why David Sacks, Paul Graham and other big Silicon Valley names had a brawl on X over VC behavior

ChatGPT, OpenAI’s text-generating AI chatbot, has taken the world by storm since its launch in November 2022. What started as a tool to hyper-charge productivity through writing essays and code…

ChatGPT: Everything you need to know about the AI-powered chatbot