Bloodbath in tech sector shows no sign of letting up

The bloodbath in the tech industry shows no sign of letting up. In the past two weeks there have been cuts at Stripe, Twitter, Meta and Intercom, with Zendesk and Salesforce also shedding jobs. And there are rumours of more to come, with Amazon said to be cutting 10,000 staff from its admittedly huge workforce.

That the bigger companies gambled a little too much on continued growth shouldn’t be much of a surprise. But it’s not just the established firms that are being forced to rethink their plans. Irish start-up – and newly minted unicorn – Wayflyer is cutting 200 jobs from its global workforce, including 70 in Dublin.

It’s a tough call to make, and a turnaround from a little over six months ago, when the company was confidently predicting it would reach the 600 mark by the end of the year. Wayflyer was beefing up its team and preparing for the next phase of its growth.

Chilling impacts

But that view of the future didn’t reckon with a cost-of-living crisis and an ongoing war in Ukraine. It seems no business, regardless of its bright future prospects or its life stage, is immune to the chilling impacts of the current downturn.

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For those of us who remember the dot-com boom and bust, it is no surprise that the tech sector has found itself here again. Cynics have long pointed to high valuations across all parts of the tech sector and wondered when it would naturally come to a halt. There have been some stark declines this year, indicating that the good times were likely coming to an end.

And now the layoff announcements are coming thick and fact.

But there is an upside to all this. While the short-term impact is painful, in the long term it is likely to result in healthier, more resilient businesses.

Those who made it through the last two recessions, and cut their cloth accordingly, would seem to lend weight to this argument. Plus it frees up talent to do what it does best – be innovative and create the next wave of tech success stories.