Job Cuts In Tech Sector Reach New Heights In 2023

2023 marked a significant shift in the technology and startup industries, defined by a noticeable increase in layoffs.

Last year, according to People Matters, the tech sector experienced a 15% increase in job reductions compared to the previous year, impacting a large number of employees worldwide. In total, a staggering 261,847 individuals were laid off, with a substantial 70% of these layoffs occurring in the United States. This trend reflects the financial and structural adjustments occurring within the tech industry.

Funding Downturns

Data by Tracxn’s shows that startups received $8.1 billion in funding, a sharp decline from the $25.9 billion in the preceding year. This reduction in funding coincided with the increased layoffs in the sector.

Notably, sectors like edtech, food, finance, retail, consumer, and healthcare were hit hard, with edtech suffering the most with around 4,700 layoffs. Funding in specific sectors such as edtech plummeted by 88.9%, while food and agriculture tech and fintech startups saw declines of 73.5% and 66.1%, respectively.

Companies with the Highest Layoffs

Some of the companies that experienced significant layoffs in 2023 include:

• Google (Alphabet): Cut 12,000 jobs globally, approximately 6% of its global workforce.
• Microsoft: Announced the layoff of 10,000 workers, nearly 5% of its workforce.
• Salesforce: Laid off about 10% of its workforce, approximately 8,000 employees.
• Meta: Cut an additional 10,000 jobs in March.
• Amazon: Laid off 9,000 workers in March.

Funding Trends Among Startups

Despite the overall downturn, some sectors still secured substantial funding. Consumer-based startups led with $3.9 billion, followed by retail at $2.3 billion, fintech at $2 billion, enterprise applications at $1.7 billion, and transportation and logistics tech at $1.6 billion.

Global Impact and Future Outlook

The tech and startup landscape in 2023 presented a challenging environment with widespread job cuts and funding reductions. The effects were felt globally, with a significant number of layoffs in the United States, India, Germany, Sweden, and the United Kingdom.

This period of turbulence highlights the volatile nature of employment and funding in the tech industry, showing the need for resilience and adaptability in the face of economic shifts and market demands.