Last month’s stock market volatility is looking like the calm before the storm. The NASDAQ has fallen more than 7% in the past month—and year to date, it’s down 32%.
The decline in the tech-heavy stock index is a barometer of the tech sector, meaning the unbridled growth of the past few years is contracting sharply as well. That’s been accompanied by recent warnings from the venture capital community that fundraising would be much more challenging for founders for the foreseeable future. Already, the layoffs have begun accumulating. May saw more than 16,000 tech layoffs. And since the beginning of June, more than 7,000 more positions have been eliminated.
Coinbase is the most recent. On Tuesday, the company announced plans to lay off 18% of its full-time workforce. With approximately 5,000 workers, that works out to about 1,100 people.
A looming possible recession and overly optimistic growth are being blamed for the decision. Earlier, the company had announced plans to pause hiring, rescinding an undetermined number of accepted job offers, which left many people stranded after leaving their previous jobs.
“We appear to be entering a recession after a 10+ year economic boom,” CEO Brian Armstrong wrote in an email to employees. “A recession could lead to another crypto winter, and could last for an extended period. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”
Coinbase was hardly alone, though. The staff trimmings are occurring at tech companies around the world and are adding up fast. Here are some other of the more recent reductions in staff, according to data sourced from Layoffs.fyi, an online tool created by entrepreneur Roger Lee after the onset of the pandemic two years ago.
OneTrust—The security company announced plans to cut its staff count by 25% (some 950 people) on June 9, roughly a month after announcing the business was on track with record quarters and increasing customer demand. The CEO cited shifting market sentiment as the reason for the cuts, saying it was necessary to position the company for long-term success.
StitchFix—The fashion company cut 15% of its jobs, resulting in 330 layoffs, as it sought to lower its expenses as consumer demand drops (largely due to the significant number of people working from home) and inflation rises.
Crypto.com—The crypto exchange fired 260 people, or 5% of the workforce, on June 10, following Coinbase’s decision to rescind accepted job offers; and the announcement earlier in the month from Gemini Trust Company, the crypto business run by Cameron and Tyler Winklevoss, that it would trim 100 positions.
BlockFi—On Monday, BlockFi joined the digital currency companies bracing for a crypto winter, laying off 20% of its workforce, an estimated 250 employees. “Since Q1 of 2022, the macroeconomic environment has shifted dramatically, sparking a dramatic pull back in equity and crypto markets,” wrote founders Zac Prince and Flori Marquez in a blog post.
Electric Last Mile Solutions—The EV startup and Tesla competitor announced Monday it planned to file for Chapter 7 bankruptcy and would liquidate the company, putting about 200 employees out of work. The company had been seeking to secure financing since its founder and CEO departed in February after an investigation found the company’s financial statements to be unreliable. That search proved unsuccessful.
Other layoffs of note—Indian software company FarEye cut 250 jobs earlier this month. Micromobility company Bird announced on June 7 it would cut 23% of its staff–about 138 workers. Healthtech unicorn Carbon Health eliminated 250 positions on June 2. And insurance-tech company Policy Genius let 170 people go that same day.
The cuts may not be over. Cryptocurrencies, on Monday, saw their biggest drop since March 2020. And U.S. stock markets continue to plumb new depths, erasing all gains made during the Biden administration. With inflationary threats not receding and venture capitalists going into lockdown mode, more and more tech companies are likely to tighten their belts, which could mean an ongoing wave of job cuts.