Are more tech layoffs coming?
Yes, more layoffs are likely coming. While there are signs that the volume of layoffs is tapering, experts we talked to expect job cuts in the tech sector to continue for the foreseeable future as large tech companies and startups continue to battle economic headwinds.
Seed and early-stage startups in particular may continue to conduct layoffs in an attempt to extend their cash runways in a difficult venture funding environment.
Tech layoffs noticeably increased at the start of 2022, ramped up in 2023, waned somewhat in 2024 and have continued in 2025.
When will layoffs stop?
Layoffs declined in 2024 compared to the previous year, but are expected to continue into 2025, although likely not at the level seen in 2023. Startups that need to preserve cash to extend their runways are more likely to conduct layoffs.
Tech layoffs will likely slow when venture capital funding increases and the startup economy stabilizes, as well as when market conditions improve and more startups gain liquidity via IPOs.
Startups that raised capital during the venture funding heyday at inflated valuations in 2021 are more likely to need to conduct layoffs if they’re not able to sustain their previous valuations or growth projections.
Why are tech companies doing layoffs?
Tech layoffs started to surge in 2022 and continued in 2023 and 2024. Companies have given various reasons for conducting layoffs.
Some companies — especially those in the e-commerce sector — nearly doubled their employee headcount to meet consumer demand during the COVID-19 pandemic’s stay-at-home mandates, and later found that they were overstaffed as daily life returned to normal.
Large tech employers such as Salesforce and Google parent Alphabet noted that their post-pandemic layoffs followed several years of rapid hiring fueled by fast growth — between 2019 and 2022, some companies nearly doubled their employee headcount. Some large tech companies also cited slowing sales and fears of a recession as reasons for downsizing.
Venture-backed startups, meanwhile, also cut jobs as a way to cut costs and preserve their cash reserves, as venture funding fell significantly after the peak in 2021. Some startups that ran out of cash and couldn’t raise new funding found themselves filing for bankruptcy or shutting down.