Technology startups have been laying off tens of thousands of workers to cope with the economic fallout of the coronavirus pandemic, potentially blunting a key innovation pipeline for the enterprise information-technology market, according to industry analysts. From a report: “Startups are a great source of innovation in the IT industry, but are now especially cash constrained,” said Max Azaham, a senior research director at research and consulting firm Gartner. Mr. Azaham said the coronavirus has made startup investors far more risk averse, resulting in a sharp downturn in investment capital for IT companies looking to raise less than $100 million. As of last week, nearly 70,000 tech-startup employees world-wide had lost jobs since March, led by ventures in the transportation, financial and travel sectors, according to a report by U.K.-based brokerage BuyShares.co.uk.
Startups in the San Francisco region, including Silicon Valley, have shed more than 25,500 jobs, including layoffs at high-profile companies such as Uber, Groupon and Airbnb, the report said. Uber in May announced more than 6,500 layoffs, cutting roughly a quarter of its workforce. A month earlier, Lyft said it would cut about 17% of its workforce, furlough workers and slash pay in cost-cutting efforts to cope with lost sales during the coronavirus pandemic. Startups developing artificial intelligence and other emerging digital tools fall under the category of tech-sector employers, which have cut jobs for four consecutive months, said Tim Herbert, executive vice president for research and market intelligence at IT industry trade group CompTIA. The cuts included a record 112,000 layoffs in April, as tech companies scrambled to slash costs, according to CompTIA’s analysis of federal employment data.
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Source:: Slashdot