Is 2022 Becoming The Year of Layoffs?
Several highly publicized layoffs have occurred recently among what was formerly thought to be some of the biggest names in the fintech industry.
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Updated November 2026. This was first published on 25 November 2022. The idea is the same. Any number below is what the original piece said then. It is not a new count.
Key takeaways
- Several highly publicized layoffs have occurred recently among what was formerly thought to be some of the biggest names in the fintech industry.
- Employees have bid farewell to employers in what have frequently been shocking decisions, including businesses experiencing record growth and some of the most heralded fintech in the world.
- The COVID pandemic has undoubtedly contributed to these layoffs, as firms have adjusted their finances to reflect the changing business conditions.
Several highly publicized layoffs have occurred recently among what was formerly thought to be some of the biggest names in the fintech industry. Employees have bid farewell to employers in what have frequently been shocking decisions, including businesses experiencing record growth and some of the most heralded fintech in the world.
The COVID pandemic has undoubtedly contributed to these layoffs, as firms have adjusted their finances to reflect the changing business conditions. But, COVID is not the sole reason for firing employees, and some businesses are compelled to make layoffs for entirely unrelated reasons.
The Layoffs Begin #
Fintechs that depend on customers accessing their wallets has been irreparably harmed by the effects of worldwide lockdowns and the subsequent decline in consumer spending. The challenger banks have felt that impact most keenly, and Monzo appears to have suffered the most.
But, adjustments in consumer spending have also had unexpected effects on some fintech. At first view, Acorns would seem to be well-positioned to weather the economic downturn, with consumers hoping to profit from a faltering stock market while also spending less as a result of cutbacks. But, Acorns just introduced a debit card product, putting them in the payments industry, which is a challenging sector to work in during a period of significant economic instability. Most crucially, though, is the fact that the company’s choice to outsource some of its customer service duties is at least partially to blame for the layoffs. According to TechCrunch, Acorns has collaborated with TaskUs to hire up to 80 contracted customer support agents, enabling it to expand its workforce overseas.
What Does It Mean? #
The tech industry has reached the point where it needs to tighten its belt after years of money pouring like water and hiring sprees. As the economy has slowed and concerns about a recession have intensified, tech businesses have been announcing layoffs one after another for several months. Over 41,000 people in the tech industry have been laid off so far. The current situation impacts tech companies because they are more susceptible to the adverse effects of rising interest rates as they depend majorly on outside funding.
Also, several tech companies may have had too aggressive hiring plans following the pandemic. Startups employed staff even when there was no immediate need for them since there was a high demand and competition for qualified employees. Many businesses saw an increase in staff size from a few dozen to hundreds.
Further, investors like to see that the companies in which they have invested take the initiative and are not inactive in the face of this potential catastrophe, even if their coffers are full of cash, as we spiral into what appears to be a potential financial disaster.
A Phenomenon That Keeps Occurring #
Unicorns frequently share one thing in common: they are capital-intensive firms, even though today’s large, late-stage startups have more viable business models than they did in the past. That implies that they can raise funds and support capital-intensive activities as long as finance is ample. But, it becomes more challenging for those big businesses to raise money when VCs cut back.
At least 65 companies have started making layoffs as of July 2022. Even major tech firms like Microsoft cut personnel in August. Both public and private tech companies, from streaming goliaths like Netflix to startups like Bolt, have announced layoffs, proving that they are not limited to a certain type of business. The surge also impacted the majority of bitcoin exchange companies, and these businesses started getting ready for the so-called “crypto winter.”.
The world has been outraged by the termination of employees by large technology giants like Meta and Twitter. awful news has also reached the Indian startup industry.
Also, take into account how little compassion the firms show in handling these situations. Think about the recent termination of a key employee by one of the leading tech firms in India. The workers alleged that the company forced them to sign a pre-written resignation letter using unethical methods. As if that weren’t enough, the company hired bouncers to handle any unpleasant situations that might come up when employees were suddenly ordered to leave.
Leading software unicorns—companies valued at over $1 billion each—are terminating more employees to cut costs and focus on productivity during this year’s budget crisis. Experts claim that these businesses are aggressively terminating employees, fighting to justify their decisions, and doing too little to support those who have been let go. Before the epidemic began in 2020, roughly 23,000 startup employees were dismissed, according to the staffing firm TeamLease.
Conclusion #
Layoffs are primarily brought on by the world economic downturn. has reduced consumer demand for its products and services and has been made worse by the conflict between Russia and Ukraine. ‘Will I be safe?’ is a question on every employee’s mind as they worry about their job security and wonder if and when their employer will start making layoff announcements. Employers may be keeping an eye on the economy and the market while asking, “How can I keep my employees’ jobs secure?”.
There is no simple method to negotiate layoffs at your firm. that doesn’t mean you should go into it without a strategy.
Embrace organizational resilience:** A resilient company can manage and preserve employee well-being despite a significant organizational change, such as a mass layoff. Be truthful and upfront:** Try not to act as if the layoff never occurred. Instead, confront the issue head-on and resolve it with the staff. Use team-building exercises:** If coworkers they cared about had to be let go, some employees would feel even more lonely or alone. Consider incorporating some team-building exercises to keep staff members engaged and connected at work.
Questions and answers #
What is the main point? #
Several highly publicized layoffs have occurred recently among what was formerly thought to be some of the biggest names in the fintech industry.
What else did the original piece say? #
Employees have bid farewell to employers in what have frequently been shocking decisions, including businesses experiencing record growth and some of the most heralded fintech in the world.