A flurry of layoffs at high-growth companies and startups have again swept over the tech ecosystem in the last 2 days. Fintech company Stripe, one of the world’s most valuable startups, was one of the most high-profile to announce cuts along with Lyft, Opendoor, Chime and of course Twitter — where potentially up to half of employees are expected to be let go today via email.
Overhired
Stripe's news arguably has the most signal value for the wider economy. In announcing the cuts, which will see ~1,000 of Stripe's 7,000-strong workforce lose their jobs, CEO Patrick Collison wrote that 2022 represented “the beginning of a different economic climate”. Collison said that the company had been “much too optimistic” about future growth and that they had “overhired for the world we’re in”.
Collison’s words echo sentiment that's being felt across exec teams at high-growth tech companies and startups. As markets hit record highs last year, fundraising was easy, and sustainable business models were eschewed in favor of growth and innovation at all costs. That narrative has flipped very quickly. It’s now almost more unusual for a tech company to have not announced job cuts — website layoffs.fyi has been tracking a list of announcements since 2020, and it’s littered with high-profile names.
But it’s not just startups having to contend with sluggish consumer spending, higher interest rates and a slowing economy. Tech giants Meta, Amazon, Alphabet and Apple have all announced hiring freezes this year.
