The wave of layoffs really hit startups in various countries. In May, an estimated 17 thousand employees were laid off from 71 startup companies worldwide.
This figure is the highest since the Corona pandemic in May and a 350% increase from April. The data is compiled by the tracking site Layoffs.fyi.
As quoted by us from Quartz, Tuesday (14/6/2022) this phenomenon of layoffs is quite surprising because during the pandemic, technology startups are actually considered to have found momentum. The pandemic is considered to accelerate the adoption of new technologies.
Despite the layoffs of a total of 50,000 startup employees between April and May 2020, the numbers then slowed and startups competed for expansion and recruiting new employees.
It is true that the pandemic, with the WFH system proliferating, is making consumers adopt new technologies. But after the pandemic has slowed, many people are now returning to old habits, so the momentum for startups is decreasing.
On the other hand, the honeymoon period for startup companies seems to have ended. A warning was also given by startup investors. World economic conditions that are not fine will have a bad impact and the condition can last a long time. Even startups have the potential to be affected.
"It's going to be a long recovery and while we can't predict how long it will take, we can advise you on how to prepare and get through it," said venture firm Sequoia Capital, whose portfolio includes Google, Apple and WhatsApp.
Tomasz Tunkuz, Managing Director at Redpoint Ventures said that many startup investors advise their startup companies to have enough cash for at least two years in order to anticipate if something bad happens.