Tech Company Layoffs: The COVID Tech Bubble Bursts

[Updated Nov. 8, 2024, with layoff announcements from Freshworks, Just Eat, Opendoor, and Akamai.]

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 biggest tech layoffs so far:

Freshworks, November 7, 2024, announcement. Layoff of 660 people, 13% of workforce.

In an effort to streamline operations, SaaS platform Freshworks announced layoffs that will impact 13% of its global workforce, according to Entrackr. The restructuring move is set to be completed by the end of the year and will cause 660 employees to lose their jobs. Freshworks reportedly has over 5,000 employees across India, Germany, France, the US, the UK, and the UAE. “We began by combining teams focused on Customer Experience (CX) products, including support, sales, and marketing, and reallocating people and investments to prioritize our fastest growing Employee Experience (EX) business. These decisions were made thoughtfully and carefully to set a strong foundation for our future,” said Dennis Woodside, CEO of Freshworks, in a stock exchange filing.

Related:Demand for Software Developers Still High Despite Cloudy Economic Outlook

Just Eat, November 7, 2024 announcement. Layoff of 300 people, 2% of workforce.

The Amsterdam-based company is laying off 300 employees globally to “fuel sustainable growth and enhance operational efficiencies,” according to Daily Mail. Roles were reportedly eliminated in 11 of its regions worldwide and across staff in customer service, products, technology, human resources, sales, marketing and logistics. The workforce reduction will account for 2% of Just Eat’s staff. The move arrives as Just Eat battles tough competition from rivals Uber Eats and Deliveroo as the trio gears up to battle for delivery orders leading up to Christmas. According to the report, redundancies came after Just East carried out a regular review of its cost base and operations, which is part of its growth strategy.

Opendoor, November 7, 2024 announcement. Layoff of 300 people, 17% of workforce.

Opendoor announced a reorganization and 17% workforce reduction on Wednesday that is “aimed at prioritizing strategic growth initiatives, flattening reporting structures, and driving efficiencies,” according to a corporate blog post. The company expects to save approximately $50 million on an annualized basis because of the move. “This reduction, combined with progress we’ve been making across other cost saving measures, are necessary as we aim to reach Adjusted Net Income profitability. We expect these actions will still allow us to scale effectively while continuing to deliver the same seamless, simple, and customer-centric experience that Opendoor is known for,” the company wrote in the post.

Akamai, November 7, 2024 announcement. Layoff of 250 people, 2% of workforce.

CEO Tom Leighton said Thursday that the company cut approximately 2.5% of the current roles across the company, according to the Boston Business Journal. “We believe that redeploying these resources will enable us to grow while still maintaining our near-term operating margin target,” Leighton said during a call with analysts, part of Akamai's third-quarter financial results. Christine Simeone, a spokesperson for Akamai, reportedly said in an email that the role eliminations were part of “a broader effort to accelerate our momentum in cloud computing and maintain strong growth in security.” According to the report, Simeone did not answer questions related to the geographical or organizational details of the cuts, noting they happened “globally.”

ShareFile, November 7, 2024, announcement. Layoff of 199 people.

ShareFile’s new owner announced layoffs that will impact nearly 200 employees just five days after it acquired the North Carolina-based software company, according to The News & Observer. According to the report, Massachusetts-based Progress Software Corp. informed the North Carolina Commerce Department on Tuesday it intends to cut 199 positions at ShareFile’s main office in downtown Raleigh. The layoffs will made in phases, with most occurring in January or February but continuing through next June. “Progress acquired the ShareFile business from Cloud Software Group because we value the business and culture that they have created,” Progress spokesperson Erica McShane said in an email to The News & Observer. “To continue this success and integrate the business into Progress, we had to make some difficult decisions about the go-forward organization, which means not everyone will be able to stay with Progress long-term.”

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