Startups are laying off people en masse and employees are scared

Check out the reasons that are generating mass layoffs in startups.

Estimated reading time: 3 minutes

After strong growth in recent years, especially at the height of the pandemic when investors released high values ​​to these companies, at least 10 startups have been reducing the number of employees since April.

However, experts indicate a scenario of caution on the part of investors in the face of current economic challenges in the global context, such as inflation, high interest rates, falling consumption and the decrease in demand for technology services with the end of social isolation.

Startups’ justification for layoffs is adjustments, reorganization, or changes in priorities.

With less money to fund new growth cycles, startups have chosen to change course, which leads to project overhaul and cost containment, resulting in staff cuts.

Startups that have shrunk their headcount

Check out some companies that laid off several employees en masse in the first half of 2022.

empiricus

Grupo Empiricus announced a “planned cut” of 12% of the workforce on June 6th.

easily

In April, Facily laid off between 200 and 400 employees as part of a restructuring plan.

Honeycomb

Also on June 1, the Peruvian company Favo laid off around 170 employees and closed its operations in Brazil, however, it managed to relocate around 20% of its staff to be absorbed by the Peru operation.

2TM Group

On June 1, Grupo 2TM, owner of Mercado Bitcoin, laid off 90 of the approximately 750 employees.

Kavak

The Mexican startup also laid off employees. According to the newspaper “O Estado de S. Paulo”, the number could reach 150 people in São Paulo and Rio de Janeiro.

loft

Also in April, Loft laid off 159 people from the group’s credit area, after completing the integration with CrediHome.

olist

Also at the end of last month, Olist laid off approximately 150 employees, with the justification that the “challenging macroeconomic environment catalyzed already planned moves to adjust the staff and gains in efficiency in the operation as a way of sustaining a positive growth agenda”.

PayPal

In May, PayPal laid off about 60 employees, according to “O Globo” newspaper. The cuts were motivated by a “global restructuring”.

Fifth floor

In April, QuintoAndar laid off 160 employees (about 4% of the total). The company’s justification for the “adjustments in the dimensioning of the cost structure” due to the increase in inflation and interest rates and the uncertainties both in Brazil and in the rest of the world.

VTEX

At the end of last month, VTEX laid off 193 employees.

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