Layoffs by US Tech Startups Record an 8X Jump in Q2 2022

August 15, 2022 (Investorideas.com Newswire) The tech startup space in the United States has been on a downward trend. According to a Moneyzine data analysis, the number of layoffs by tech startups increased eightfold in Q2 2022. The firm has presented data showing 170 startups and tech-oriented companies laid off employees between April and July. In contrast, only 20 did so in the previous quarter.

“In the face of rising inflation and a potential recession, many startups are finding that they need to reduce their workforce to stay afloat,” explains Moneyzine CEO Luke Eales. He adds, “Startups are particularly vulnerable to the current economic conditions because they often have high overhead costs and thin profit margins.”

Layoffs Peaked in June

While referring to Crunchbase News’ Tech Layoffs tracker, Moneyzine asserts that at least 35 tech companies cut their staff in May. But that figure would more than double in June to stand at 74 companies. Those job cuts affected startups in various industries, from food delivery to travel booking to fitness tracking.

Many attribute June’s uptick in layoffs to the month being the second quarter’s end. Consequently, firms were rushing to ensure that their financial books were in good order. They also focused on straightening their priorities before Q3, and H2 2022 took off. That’s why the affected companies ramped up their layoffs toward June’s tail end.

Moreover, June was a turbulent time for public markets. The Fed further compounded that situation by instituting the largest interest rate hike in four decades. That heightened fears of a potential recession leading firms to take cost-cutting measures, including job cuts.

What Does the Future Hold?

While the number of layoffs in the tech startup space is concerning, it is important to note that this is not indicative of the entire industry. There are still many successful startups out there, and the overall health of the tech sector remains strong.

Those focusing on consumer-oriented products and services continue to do well, thanks to solid demand from consumers and investors. But even they are starting to feel the pinch as investors become more selective about where they put their money. Full story and statistics can be found here: Layoffs by US tech startups record an 8X jump in Q2 2022

More Info:

Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.

More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com

Global investors must adhere to regulations of each country. Please read Investorideas.com privacy policy: https://www.investorideas.com/About/Private_Policy.asp