Tech layoffs are surprisingly frequent. What can we do?

Another week, another tech layoff. Is anyone even surprised? Why is this so frequent in a booming economy? How can the startup community better manage the aftermath?

Given that we at Layoff-Aid specialize in improving outcomes in the wake of downsizing, we set out to answer these questions — for the tech community and for ourselves. Our goal was to produce a comprehensive overview of tech downsize events in the SF startup ecosystem. This would help us better understand how frequently these events occur, communicate the aggregate impact on SF Bay Area technologists more effectively, and evolve the Layoff-Aid platform to better serve the startup community going forward.

The scale of layoffs that we found surprised us, even though we’re the ones reporting downsize events in our defenders of the downsized newsletter each and every month. Before reviewing our findings, let’s make like Nate Silver and summarize our methodology.

We included:

• Software and hardware technology companies
• Downsize events with publicly reported data on the number of people affected (primary source is WARN where available, followed by a wide range of local sources like Mercury News, SFChronicle, Los Angeles Times, as well as national or industry sources like Bloomberg, the Wall Street Journal, BizJournals, TechCrunch, GamesIndustry, MarketWatch, Fortune, GamaSutra, Business Insider, Cheddar, Amplify, and many more)
• People affected who are based in the SF Bay Area (San Francisco, Peninsula, East Bay, South Bay)

We excluded:

• “Non-tech” companies: Dining, manufacturing, publishing, biotech, other
• Downsize events that do not have credible, publicly-reported data on the number of people affected (example sources include Layoff-Aid job-seekers, thelayoff.com, Glassdoor, any anonymous sources)
• People affected outside of SF (even if the parent company or HQ is in the Bay Area)

Here’s what we learned for the fiscal year 2017–2018: 41 downsize events affecting 4,706 people in the SF Bay Area alone

2017–2018 Fiscal Year. Data compiled by Layoff-Aid.com

How are we comfortable rounding the headline up to 5,000+ people and 50+ downsizes? The numbers on the chart are the absolute lowest number possible. We exclude:

1. The known but unlisted: UploadVR, OpenTable, Pandora, and many others due to uncertainty around number of people affected. We also exclude many downsizes that we learn about from job-seekers coming to our platform — we do not include those layoff events or statistics in this report for privacy and confidentiality reasons.
2. The unknown (and unlisted): many downsizes go un-reported, especially among smaller companies that don’t trigger WARN.

We also feel safe about saying “5,000+ people get downsized in 50+ downsizes each year” after we went back to 2016–2017 and found 58 downsize events affecting 6,010 people — even more downsize activity:

2016–2017 Fiscal Year. Data compiled by Layoff-Aid.com

Revisiting our original questions: a tech layoff in the SF Bay Area isn’t surprising — it’s the norm, with over 100 technologists getting downsized each week. If we estimate the impact of unlisted layoff events, we might expect the downsize activity to double or even triple, topping 10,000 people each year. Many (or most!?!) tech downsizes go unreported, particularly among layoffs affecting less than 50 people at a time.

In many ways, VC-fueled tech startups remind me of punk rock: energizing, exhilarating, and explosive. I love them both. However, when I hop in to the mosh pit, I know I’ve got a community that literally has my back:

“there’s that un written rule in a mosh of when someone falls down we pick them up”

Can it really be that a Rise Against mosh pit has a better support system than bleeding-edge tech companies in Silicon Valley? How can we better manage the predictable chaos?

We can build the network our community deserves. We can’t predict which formerly-funded startup will be responsible for next week’s layoffs, but odds are that one or more will. Amazing talent will become available. In exceptional circumstances, we see pockets of the community take action and come together, like the gaming industry did for those affected by the Capcom and Telltale layoffs. We applaud that sentiment, and we want to empower that kind of action, for every downsize, at scale.

For those with an eye for talent acquisition, you’ll realize that there’s a unique opportunity if you’re hiring in the Bay Area. Layoff-Aid for Hiring helps you source amazing SF tech talent you might otherwise miss, so you can easily recruit them before they get scooped up by the competition.

And, we’re excited to introduce Layoff-Aid for Downsizing to better serve firms that want to help employees transition. If you’re a startup’s lead singer, and you see a little piece of chaos breaking out, use your microphone to downsize with dignity and grace. Before you let people go, line up a platform specifically dedicated to providing downsized job-seekers with whatever resources they may want. There are at least a handful, like The RiseSmart Team, Right Management, and Lee Hecht Harrison, but Layoff-Aid is the only platform powered by the explicit mission of helping people affected by layoffs, focused exclusively on SF tech talent, and serving up the proprietary Layoff-Aid for Hiring talent network.

Let’s work together, proactively, from here on out. When someone falls… we pick them up!

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