May has been the most brutal month for tech layoffs since the covid crisis. In total 15,764 employees lost their jobs as fears of a recession mount.
Data from Layoffs.fyi shows that terminations are at their highest since the peak of the covid pandemic. The months of April and May in 2020 saw 26,651 and 25,804 layoffs respectively. Those highs tailed off sharply in June 2020, with redundancies falling to 7,627 for the period.
Layoffs fell into the low thousands and even hundreds by the end of 2020, and that trend continued right through 2021, but the start of 2022 has once again witnessed climbing terminations.
Crypto is not immune
Among the many tech companies making layoffs in May, more than a few had strong crypto and fintech ties.
Mexico’s largest crypto exchange Bitso was among the companies that reported cutbacks this month, with 80 of its 800 staff losing their jobs. Bitso was valued at $2.2 billion in May of last year, making it the first crypto unicorn in Latin America. Now the company is seeking to trim the fast as the economic climate worsens.
The smaller Argentinian exchange Buenbit similarly terminated the employment of around 80 staff members this month, comprising just under half of its team. The company which operates in Argentina, Mexico, and Peru had plans to expand into Colombia and Brazil. With the economic forecast looking less bright, the company has now put those plans on hold and will instead redouble its efforts in existing markets.
Bolt, the one-click checkout app, was also among the companies that shed significant numbers of its workforce. In April, the company acquired crypto startup, Wyre, for $1.5 billion, bringing its total employees to over 900. Following a redundancy round, the number of people on the company Slack channel dropped to a mere 660.
In one of the single largest redundancy announcements the Swedish fintech firm, Klarna dismissed 10% of its 7,000 workforce. The buy now pay later platform informed the unlucky 700 that they were surplus to requirements via a pre-recorded video message.
A good thing?
The 15,000 tech workers seeking fresh opportunities will now be wary of market conditions and what it might mean for their short to medium-term prospects. If a recession does strike, those joining the ranks of the recently unemployed may find themselves in a rapidly growing group, with competition in the job market becoming particularly fierce.
Meanwhile, billionaire businessman Elon Musk recently went on the record to say that a recession would be a “good thing.” As Musk sees it, “bankruptcies need to happen.”
That’s the sort of argument that may play well to portions of his Twitter audience, but try telling that story to May’s 15,000. The reception may be a little frostier.
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