All data pulled on August 2nd, 2022
If you work in tech, it might feel like no company is safe from layoffs right now.
And there’s no denying, it’s been a tough few months for tech workers. But if you take a step back from saturated LinkedIn newsfeeds (and a deep breath), you may find the state of the industry is not quite as dire as it seems.
New research from Indeed puts things in perspective: Software development job postings fell 13% from June to July 2022, but they remain 107.3% above their pre-pandemic baseline. Tech roles also figure prominently on the list of jobs that have seen major growth in demand from 2019 to 2022.
But it’s true, some industries within tech may be more susceptible to layoffs in the current economic climate than others. The question is, which ones? As promised in my last piece about layoffs by region, I took a closer look at data on layoffs by industry to try and answer this question. Here’s what I gleaned…
Click to jump ahead:
- Which tech industries have seen the most layoffs worldwide?
- Which tech industries have seen the most layoffs in the U.S.?
- Which tech industries have seen the most layoffs in Canada?
- Which tech industries are the most susceptible to layoffs?
Which tech industries have seen the most layoffs worldwide?
The finance industry (categorized separately from crypto) has seen over 60 layoffs this year. Notable companies in this category include retail brokerage Robinhood, Swedish buy now, pay later provider Klarna and Canadian online investment service Wealthsimple.
When you consider today’s uncertain market, paired with inflation and rising interest rates, it’s no surprise demand for online financial services is slowing down. A post-pandemic return to more traditional ways of banking, trading and shopping are undoubtedly at play, too.
Healthcare companies are also feeling the pandemic comedown. Many of the 40+ companies in this bucket focused on telehealth — that is, serving clients digitally. Invitae, a San Francisco-based genetic tech company, conducted the most severe layoff compared to other healthcare companies in this category citing the need to realign and restructure.
This pattern repeats down the list. Digital retail companies, like Shopify and Stitch Fix, miscalculated post-pandemic growth. Food delivery services, like Gopuff and Getir, made the same mistake. Online education platforms, like Career Karma and Unacademy, ditto.
Though the pandemic may be “over”, it seems we’re not done feeling its effects. On the plus side, the fact that the recruiting industry has only seen one layoff this year bodes well for the strength of the job market as a whole.
Which tech industries have seen the most layoffs in the U.S.?
If we look at data from the U.S. alone, the healthcare and finance industries switch places — though by a narrow margin. In addition to Invitae, sizable startups like weight-loss app Noom and healthcare AI automation platform Olive have also conducted layoffs this year.
Of course, there are many more companies on this list, but they all seem to have one thing in common: they grew too fast and thought that growth would stick post-pandemic.
In terms of the finance industry, we’ve touched on Robinhood — an online brokerage that boomed during the pandemic. Robinhood just announced its cutting 23% of its staff, making it the only American finance company to do two rounds of layoffs this year.
Continuing down the list, marketing and real estate join the retail industry in a tie for third place. The most drastic example among these categories is Better.com, an online mortgage service that has conducted not one, not two, but three layoffs in less than a year.
The remaining categories mirror worldwide trends fairly closely. The only exception is crypto, which drops to position 14. This speaks to the fact that crypto has caught on worldwide, with startups located everywhere from Singapore to Sao Paulo.
Which tech industries have seen the most layoffs in Canada?
In Canada, our data set is much smaller, but it does mirror worldwide trends in broad strokes. If you look at the total number of layoffs by industry, retail comes in first. But if you look at unique layoffs, the playing field evens out.
What do I mean by that? Well, several Canadian companies have conducted more than one layoff this year. Note, conducting more than one layoff does speak to the overall volatility of an industry, which is why I took all layoffs into account for these data visualizations. But given the small size here, it made sense to point this out.
Shopify did a smaller layoff in early July before their larger announcement last week. Bonsai, an embedded commerce platform, conducted layoffs in April followed by another round in June, cutting approximately 89% of its staff. Meanwhile, in the finance industry, lending firm Clearco laid off around a quarter of its staff in July alone.
So, if we’re considering unique layoffs in Canada, retail, finance, crypto and sales are neck and neck… not that this is a race any industry wants to win.
Which tech industries are the most susceptible to layoffs?
If we look at layoffs in the U.S. and worldwide, there are two categories that consistently top the charts: finance and healthcare. (Seeing as the sample size for Canada is quite small, we’ll set that data aside.)
If you consider the volatility of the present market, as well as the massive shift in the way we handled healthcare during the pandemic, these findings add up.
Are these industries “most” susceptible to layoffs? It’s hard to answer this question conclusively with the data at hand. To make that kind of a statement, I’d need to do a whole lot more research… and develop omniscience.
But are they “more” susceptible to layoffs? Yes, most likely. Suffice to say, if your main priority is job security, it may be wise to look to more stable industries within tech, like HR, customer support and legal services.
What does all this mean for tech workers?
At the end of the day, know that you have options. Remember, the recruitment industry has only seen one layoff out of over 400. And the job market in tech may have cooled, but it’s still stronger than it’s ever been in the past.
If you’ve been laid off recently, I hope you take some small comfort in these facts. But I know from personal experience, a layoff is no easy thing. Which is why in the last article in this series, we’ll be sharing the results of a survey on how companies can better handle these difficult situations. Stay tuned!