All around the world, it seems that the pace of startup layoffs has slowed down over the summer, despite the world economy still figuring out how to most effectively navigate the COVID-19 pandemic.
Layoffs.fyi has utilized crowdsourcing to track startup layoffs since the COVID-19 crisis began. While this isn’t the most scientific means of tallying layoffs, it nonetheless gives us an evolving snapshot of how startups around the world are handling this unusual situation.
And what does the snapshot tell us? After shooting up rapidly in March and April, startup layoffs have leveled off throughout the summer:
This isn’t a total shocker; previous times we reported layoffs.fyi’s numbers, such as at the beginning of July, that plateauing seemed imminent. Indeed, many startups seemed to be using the summer to secure new funding, even in those industries heavily impacted by the virus.
As you’d expect, the startup industries most heavily impacted by layoffs have been those that hinge on face-to-face contact, such as transportation and retail. That’s also stayed pretty constant throughout the summer; for example, there hasn’t been a sudden and unexpected spike in layoffs at startups related to the energy or legal markets, even as transportation and travel startups faced some difficulties.
Given the nature of the pandemic, it stands to reason that startups focused on creating technologies for businesses—such as a cloud-based accounting system, or a better way to track sick hospital patients via a mobile app—would continue to do better than, say, ridesharing companies such as Uber and Lyft, which have shed thousands of jobs due to imploding business. Startups focused on gaming, streaming, online education, and other services have likely seen a spike in activity from all the people stuck at home, as well.
When the pandemic began, San Francisco led all other areas in amount of startup layoffs. Again, this seemed logical, since the city and the surrounding area have long been hotbeds of startup growth. Throughout the summer, though, the number of international startups laying off technologists has slowly crept up, eventually surpassing all U.S. tech hubs.
One caveat to this data: layoffs.fyi can include the international offices of domestic startups in its “international” tally. For example, if Uber decides to close an office in another country, those layoffs are (inevitably) marked “international,” even if the company itself is headquartered in California. That being said, the vast majority of companies listed on the website’s international section are indeed headquartered overseas, it seems.
As Dice’s ongoing COVID-19 Sentiment Survey has made clear, technologists still have a lot of optimism about their individual prospects, as well as the tech industry as a whole. With each new iteration of the survey, we’ve found that roughly a third of technologists who are currently employed full-time plan on looking for a new job sometime within the next two weeks. While the pandemic has forced many businesses to restructure and readjust their strategies, it’s clear that many people see solid opportunities out there.