Nearly 70,000 Tech Startup Employees Have Lost Their Jobs Since March (wsj.com) 47
Technology startups have been laying off tens of thousands of workers to cope with the economic fallout of the coronavirus pandemic, potentially blunting a key innovation pipeline for the enterprise information-technology market, according to industry analysts. From a report: "Startups are a great source of innovation in the IT industry, but are now especially cash constrained," said Max Azaham, a senior research director at research and consulting firm Gartner. Mr. Azaham said the coronavirus has made startup investors far more risk averse, resulting in a sharp downturn in investment capital for IT companies looking to raise less than $100 million. As of last week, nearly 70,000 tech-startup employees world-wide had lost jobs since March, led by ventures in the transportation, financial and travel sectors, according to a report by U.K.-based brokerage BuyShares.co.uk.
Startups in the San Francisco region, including Silicon Valley, have shed more than 25,500 jobs, including layoffs at high-profile companies such as Uber, Groupon and Airbnb, the report said. Uber in May announced more than 6,500 layoffs, cutting roughly a quarter of its workforce. A month earlier, Lyft said it would cut about 17% of its workforce, furlough workers and slash pay in cost-cutting efforts to cope with lost sales during the coronavirus pandemic. Startups developing artificial intelligence and other emerging digital tools fall under the category of tech-sector employers, which have cut jobs for four consecutive months, said Tim Herbert, executive vice president for research and market intelligence at IT industry trade group CompTIA. The cuts included a record 112,000 layoffs in April, as tech companies scrambled to slash costs, according to CompTIA's analysis of federal employment data.
Startups in the San Francisco region, including Silicon Valley, have shed more than 25,500 jobs, including layoffs at high-profile companies such as Uber, Groupon and Airbnb, the report said. Uber in May announced more than 6,500 layoffs, cutting roughly a quarter of its workforce. A month earlier, Lyft said it would cut about 17% of its workforce, furlough workers and slash pay in cost-cutting efforts to cope with lost sales during the coronavirus pandemic. Startups developing artificial intelligence and other emerging digital tools fall under the category of tech-sector employers, which have cut jobs for four consecutive months, said Tim Herbert, executive vice president for research and market intelligence at IT industry trade group CompTIA. The cuts included a record 112,000 layoffs in April, as tech companies scrambled to slash costs, according to CompTIA's analysis of federal employment data.
Oh the Irony (Score:4, Funny)
Old Take: "Learn to Code, dinosaur!"
New Take: "Nobody's firing plumbers, junior"
Re:Oh the Irony (Score:5, Insightful)
Old Take: "Learn to Code, dinosaur!"
New Take: "Nobody's firing plumbers, junior"
That's not a new take in some circles. 20 year ago we had discussions on Slashdot about how plumbing jobs can't be offshored, won't be replaced by robots, and the need is not going away. It'll be true 20 years from now as well.
Re: (Score:2)
Old Take: "Learn to Code, dinosaur!"
New Take: "Nobody's firing plumbers, junior"
That's not a new take in some circles. 20 year ago we had discussions on Slashdot about how plumbing jobs can't be offshored, won't be replaced by robots, and the need is not going away. It'll be true 20 years from now as well.
My friend is a union plumber who does CAD for a commercial commercial plumbing outfit. I think he has the most assured employment of just about anybody I know.
Re: (Score:2)
Well, the commercial construction industry has had big ups and downs over the 40 years I've been in it. Not as bad as some, like aerospace, but still enough to possibly get you laid off every decade or two. An actual plumber that can also work on fixing existing systems will have some advantage over a CAD operator working on design of new buildings
Re: (Score:2)
Well, the commercial construction industry has had big ups and downs over the 40 years I've been in it. Not as bad as some, like aerospace, but still enough to possibly get you laid off every decade or two. An actual plumber that can also work on fixing existing systems will have some advantage over a CAD operator working on design of new buildings, too.
Oh definitely. I just mean he gets to work fairly regular office hours right now, doing stuff he finds interesting (being interested in computers), but he can always switch back to being more hands on if that's where the work is.
Poober (Score:2)
I bring you Poober - the Uber for bathrooms. Shared mobile toilets available on demand on an app. Push the poop button (or message the poop emoji) and a fully functional bathroom in a truck will drive up to your place of abode.
If you dont have a bathroom or a kitchen (and with Poober eats you dont need a kitchen) in your house/trailer/tent/car you dont need a plumber.
Poober units are autonomy level 5 and fully manufactured at a low throwaway price in a 3rd world country factory. When they stop working you d
Re: (Score:2)
It'll be true 20 years from now as well.
I think you might be underestimating what Boston Dynamics can do in 20 years.
Re: (Score:2)
I fully believe 20 years from now that plumbers will use a robot as part of their job. But a human will talk to a customer on site to find out what the problem is, to present options that have different costs and collateral damage, to discuss the pros and cons of each, and to deal with whatever corner cases the robot can't (which will be half the job for generations). The only place where plumbing can be even "mostly robotic" is home construction to fixed floorplans.
I really can't see robots replacing mos
Re: (Score:3)
Re: (Score:2)
Re: (Score:2)
Re: Oh the Irony (Score:2)
I took a look at an old (2006) occupation guide which included plumbers. It claimed growth in the profession was being driven primarily by remodeling and new construction. So I doubt being a plumber is really that safe, since most of the work seems to not be related to repairs which cannot be put off during an economic downturn. When in a recession, electricians and plumbers are likely to be just as disposable as programmers. Sure we still need some, just not as many. Like any other at risk occupation.
Re: Oh the Irony (Score:2)
Re: (Score:2)
Manual labor is *the ultimate basic income*. Even with full automation in factories, or maybe most software, we will need interior designers, electricians, painters, plumbers, at least to set up and control these robots.
But many people are "above" these jobs. Let me be frank, I hate doing them at home, and I would very much dislike cleaning other people's mess. But if you need to feed your family they actually pay well.
Re: (Score:2)
Why no funding? (Score:4, Interesting)
A major reason why startups lack funding is that without ability to travel to meet together, company leaders and capital investors cannot sign deals (capital investors won't sign deals without meeting the company leaders). Many startups that were cruising along for another successful funding round in April/May did not do a dealt then and now find they won't be able to do a deal for months longer. They are running out of cash - because venture capitalists only give another round of investment when the previous ones have nearly run out and "nearly run out" was in May. Now their cash is really running out.
Re: (Score:2, Interesting)
Re: (Score:3)
Do we even know if this is unusual? Startups after all come and go on a daily basis, and for those that stick around churn is normal.
Re:Why no funding? (Score:4, Interesting)
Yes, this is a very unusual time.
I'm a startup "person," and the VC market right now is insane. The PPP made it clear that private investors and the companies backed by private investors were going to be sacrificed to prioritize public companies and wealthy individuals. So either VCs simply took it on the chin, or they've had to change their business model significantly, many are just leaving the VC model behind. The necessary changes are to be to the benefit of founders and employees. That's a fine change from my point of view, but it's worth understanding that the employees of "old" VC model companies are the ones who really are paying for it.
Eventually we will stop hearing about the problems in each individual private sector of business (restaurants, self-employed people, local retail, tech startups, etc.) and start hearing people talk more about how strange it is that the only place that's seen a real recovery from the crash in March is the public stock market. The longer this pattern continues, the more difficult it will be for anyone not at a public company.
Re: (Score:3)
The stock market has not seen a recovery. There now exist 25% more USD dollars than existed in March. So the Stock Market has grown by 20% to absorb those extra dollars. All the normal places where extra dollars could go and create inflation or go out and create foreign investment have not been available due to shutdowns. In fact if not for the money printing we would have been looking at deflation and a great depression style contraction. Even the wealth effect of stock market gains has nowhere to go. This
Re: (Score:2)
Re: (Score:2)
TFS talks about Lyft, Uber, Groupon and Airbnb. Those are large successful corporations, not startups. Those guys still get face-to-face meetings with vulture capitalists. They're just suffering through the economic downturn. I'm sure it's worse for startups, but most startups are only trying to sell the company, not any actual product, so reduction in consumer spending won't affect them.
Re: (Score:2)
"Startups" (Score:4, Informative)
I'm sure a lot of startups had have to let employees go but....
Startups in the San Francisco region, including Silicon Valley, have shed more than 25,500 jobs, including layoffs at high-profile companies such as Uber, Groupon and Airbnb,
Hold up here, we are including numbers from Uber and *Google* in startup layoff numbers???
That aside, these layoffs are why it's a good idea to always seek out what extra things you can do for a company, even when times are good... that means you'll be one of the last people laid off, generally (though nothing is ever totally avoidable).
Re: (Score:2)
That aside, these layoffs are why it's a good idea to always seek out what extra things you can do for a company, even when times are good... that means you'll be one of the last people laid off, generally (though nothing is ever totally avoidable).
It really does depend massively on what the lay off is. Often an entire function will be shuttered (indeed the case in some high profile layoffs), and no matter how wonderful you have been, you are toast.
And this suprises who? (Score:3)
Seriously we are in the middle of a pandemic where we all generally sat on our hands for 4 weeks which really crushed our economy. Why are we surprised if startups are failing amid this economic downturn?
Sounds to me like we are actually getting off pretty darn light on all this and I'm generally not a "glass half full" kind of guy. We are putting folks back to work at a furious rate and rapidly reducing unemployment reminiscent of the great depression, the stock market which lost nearly half of it's value is back to about last year's levels. There is a long way to go, but given we don't really have any serious economic problem that caused this to work off, and looking at the pace we are putting folks back to work being so unexpectedly fast, it sure looks like recovery is happening faster than most would believe.
So I ask you, why are we surprised about a bunch of startups pulling the rip cord and turning a bunch of employees into the work force? Seems like part of the natural progression of things. Also, it doesn't seem the rate at which this is happening is all that bad... Yea, maybe it's up a bit from recent history, but it doesn't look anything like the Dot.Com crash I lived through before, and prospects are good moving forward.
Tech Company Lay-Offs != Tech Worker Lay-Offs (Score:5, Interesting)
The article never states that tech workers are being laid off, just that workers at tech companies are being laid off. There are certainly some developer (e.g.) lay-offs, but not many. Instead...
These companies probably are not laying developers off, because they can't easily hire devs back later. The market is too tight for that, and on-boarding a developer to your code-base and culture is expensive. And nearly impossible in an all-remote workplace.
Re: (Score:2)
Also Sales staff: Hardly anybody is buying what we're selling, particularly in the travel sector because everywhere is closed, so we don't need most of you lot right now.
Re: (Score:2)
My company laid off about 20% of its work force in June, including myself who is a SSE One of my coworkers who is also SSE was also laid off. So its not just HR/support staff.
Re: (Score:1)
I'm surprised Trump hasn't directly made this argument, saying that we should simply let some die to benefit the majority.
But it's not that simple: the hospitals would be overwhelmed and nobody could get any other kind of care. It would be like not having medical care for about a year.
Re: (Score:2)
the hospitals would be overwhelmed and nobody could get any other kind of care. It would be like not having medical care for about a year.
This covid-19 has shown how inadequate hospitals are to deal with a major crisis. Last year I took a friend to the ER, she had intense stomach pains. It took eight hours till finally was examined by physician. It was from eating some raw fish left out a little too long, got a pill to ease the pain then back home with a prescription. I saw others waiting there even longer, various ailments. I can only assume a cardiac arrest or injury trama like a arm missing will get immediate attention. Otherwise I was thi
Re: (Score:2)
On the plus side everyone who survives woud believe in evolution.
This needs a movement (Score:2)
I can totally see how this is especially hard for start-ups. Others, they at least had something and get to lose it all before they end up having nothing, but start-ups have it the hardest. They start with nothing, then they get nothing and they end up having nothing. They don't even get to lose it. And then they're supposed to start again. This is not fair. Start-ups Matter!
Re: (Score:2)
Not really especially for startups. Airlines have been hit way harder and will have seriously massive layoffs.
Re: (Score:2)
Oh my, you didn't catch the sarcasm.
Many would fail anyways (Score:3)
cash constrained? (Score:1)
Figure don't lie, but liars sure can figure. (Score:3)
I'm skeptical of the argument for one reason. They don't cite the numbers from the same period the year before or the year before that. Startups are a risky proposition. Lot's are going out of business all the time. So give us a base line to compare.