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Tech Company Layoffs: The COVID Tech Bubble Bursts

UPDATED March 14, 2023 — 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.

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:

Meta, March 14, 2023, announcement. Layoff of 10,000 people, 13% of workforce.

Meta's CEO and founder Mark Zuckerberg announced that it will lay off about 13% of its workforce in the latest restructure move he's calling a "year of efficiency." This follows November's 13% job reduction at the company that has been reeling from over-acquiring and hiring within the industry. Meta also plans to close almost 5,000 job postings that have yet to be filled, detailed by Zuckerberg in the memo. The layoffs will affect its recruiting team this week, with a restructuring of its tech and business groups to come in April and May. According to the New York Times, "Meta is dealing with many challenges these days. It is grappling not only with a digital advertising slowdown but also with Apple’s privacy changes to its mobile operating system, which have restricted Meta’s ability to collect data on iPhone users to help target ads."

GoTo Group, March 10, 2023, announcement. Layoff of 600 people.

Indonesia's biggest tech firm PT Goto Gojek Tokopedia announced another round of layoffs aimed at streamlining the organization and boosting the company's profitability according to Reuters. Becoming more "agile" and maintaining growth amid challenging global economic conditions are the major focus moving forward.

Xero, March 9, 2023, announcement. Layoff of 800 people, 15% of workforce.

CEO Sukhinder Singh Cassidy's memo to employees said the cuts were part of a plan to stream line Xero's operations, realign the business and provide a better balance of growth and profitability according to Stuff. The impact of the restructure will be felt most by production, marketing, strategy and talent teams.

Atlassian, March 6, 2023, announcement. Layoff of 500 people, 5% of workforce.

According to a blog post written by Atlassian's co-founders and co-CEOs Scott Farquhar and Mike Cannon-Brookes, the cuts signal a greater focus on key priorities such as IT service management and helping customers move workloads from on-premises data centers to the cloud, and thus has less to do with finances compared to competitors. Layoffs won't be evenly distributed across the company, with the most impacted teams including Talent Acquisition, Program Management, and Research & Insights.

Read the rest of this article on InformationWeek.

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