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Tech Company Layoffs: The COVID Tech Bubble Bursts

UPDATED February 9, 2024 — As COVID-19 drove everyone online, tech companies hired like crazy. Call it the COVID Tech Bubble. Now we are hitting the COVID tech bust as tech giants shed jobs by the thousands. Check back regularly for updates to our IT job layoffs tracker.

[Updated February 9, 2024, with layoff announcements from Pure Storage, Getaround, and Grammarly.]

When much of human activity moved online during the height of the pandemic, tech companies were thriving. Call it the COVID tech bubble. Now we've hit the COVID tech bust.

By the second half of 2022, tech companies had initiated significant layoffs — something that had followed an extended period of frenzied tech hiring and attention to employee experience. Standard explanations for the cuts were that companies hired too many during the pandemic and they were looking at the specter of a recession in the months ahead. It sounds a lot like the dot-com boom and bust of yore. Not all companies are impacted equally. It's the ones that hired at an accelerated rate during the boom that seem to be hitting the brakes right now.

At the same time, IT pros with cybersecurity, cloud, and data analytics/machine learning skills have remained in high demand so far.

In this space, InformationWeek will document some of the more significant layoffs, updated regularly. Be sure to check back.

Here's a look at the big tech layoffs so far:

February 2024 Layoffs

Pure Storage, February 8, 2024, announcement. Layoff of 275 people, 4% of workforce.

The data management company is laying off 275 employees accounting for 4% of its workforce, according to Blocks and Files. This move follows two previous rounds of cuts in January and April of last year at Pure Storage. Teams responsible for managing the company's partnerships, as well as several of its flash storage arrays' software features have been directly impacted. These teams were also tasked with developing Pure Storage's database, AI and analytics features, and its unstructured data management capabilities according to the SiliconANGLE.

Getaround, February 8, 2024, announcement. Layoff of 30% of workforce.

The car sharing company that enables vehicle owners to rent out their assets is laying off 30% of its workforce as part of a restructure plan according to TechCrunch. Getaround is focused on creating a path to profitability by restructuring its workforce and operations to reduce costs, though it wouldn't reveal the total of impacted employees that currently staff its operations in North America and Europe. “Our focus on profitability and sustainable business growth necessitated this difficult workforce reduction program,” Getaround CEO Sam Zaid said in a statement obtained by TechCrunch.

Grammarly, February 7, 2024, announcement. Layoff of 230 people.

In an effort to restructure and focus on an “AI-enabled workplace of the future,” Grammarly announced it is laying off 230 employees from its global workforce according to a company blog post. CEO Rahul Roy-Chowdhury shared the news with staff through an internal memo that was also posted to its corporate blog. “As we strengthen our focus toward driving the AI-enabled workplace and deepen our technical investments in AI, we will need a different mix of capabilities and skillsets. We also need to redesign our organization to improve the quality and speed of collaboration — and that means, among other things, restructuring roles and co-locating certain teams,” Roy-Chowdhury wrote in the memo. According to Roy-Chowdhury, this was not a cost cutting move, as Grammarly is growing and remains profitable. The company will also continue to hire across a variety of departments and roles globally.

Docusign, February 6, 2024, announcement. Layoff of 440 people, 6% of workforce.

The online signature provider initiated a restructure plan to improve financial and operational efficiency that includes layoffs impacting 440 employees or 6% of its workforce, according to CNBC. DocuSign's sales and marketing teams will be impacted most by the cuts, but the plan won't be completed until the end of its second fiscal quarter of 2025.

Amazon, February 6, 2024, announcement. Layoff of 400 people.

In an effort to drastically decrease operating losses, Amazon is laying off 400 employees across its healthcare units at One Medical and Amazon Pharmacy according to Reuters. Amazon Healthcare Services executive Neil Lindsay shared the news with employees in a memo on Tuesday, which revealed Amazon's request for the healthcare company to save an additional $100 million through this restructure.

Read the rest of this article on InformationWeek.


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