Layoffs are ticking up now (Google, Cisco, Roku, Evolve, Drift to name a few) as companies work through 2024 operating budgets. As interest rates and the cost of capital remain elevated in Q4, I suspect that companies - especially those with elevated Debt/EBITDA ratios - will announce further layoffs in October and November. However, I … Continue reading When Will The Next Big Round Of Layoffs Occur?
I expect a weak Q1 earnings season later this month across the Technology sector, including Enterprise Software. Companies may report in-line Q1 Revenues & EPS (perhaps modest EPS beats), but the pace of new sales activity will have fallen off year-over-year during the quarter, especially during the 2nd half of Q1. There is simply too … Continue reading Tech Layoffs & Q1 Earnings
Given that Tech layoffs have ramped higher each quarter since Q3 2021, I don't see how Tech is an investor safe haven. Q1 2023 is the worst quarter yet in terms of the number of employees laid off and it could get far worse from here as this credit crisis will be more severe than … Continue reading Tech Is No Safe Haven
Regardless of where CPI lands tomorrow, my view is that the Fed will hold rates higher for longer than the market believes. Higher interest rates combined with a shrinking money supply (QT), translates to: tighter monetary conditions, a higher cost of capital, less revenue visibility for companies, more employee layoffs and a deeper recession. The … Continue reading Tomorrow’s CPI = Noise
Approximately 102 thousand employees have been laid off across the Technology industry in 2023. That figure is 64% of 2022's 160 thousand Tech sector layoff total. If you thought June 2022 was bad from a layoff perspective, November 2022 was worse. If you thought November was bad, January 2023 was worse. My guess is that … Continue reading Layoffs Continue To Ramp
We recently wrote that there were more Tech-related layoffs in Q4 2022 than during the COVID trough in Q2 2020. Approximately 23% more Tech-related layoffs (73,899) occurred during Q4 2022 versus the COVID trough (60,141), in Q2 2020. There is plenty more room to cut. One thing is for sure - there is more room … Continue reading Was Q4 The Bottom For Tech Layoffs?
More Technology-related layoffs have occured in Q4 2022 than at the COVID economic trough in Q2 2020 (51,048 employees in the month of November 2022). Technology layoffs continue to mount as: interest rates climb; inflation remains elevated; global demand sputters and; as macro-economic uncertainty remains high. Check out Layoffs.fyi (created by Roger Lee), to track … Continue reading Technology Layoffs Continue To Climb
When it comes to Technology companies, headcount reductions are rarely "one & done". This used to be especially true of Bay Area Technology companies which are famous for lacking operating discipline (i.e. cost discipline). However, the Bay Area aversion to running profitable businesses has permeated the Tech sector over the past 12 years of easy … Continue reading Tech Company Layoffs Are Rarely “One & Done”
More than 24,000 Technology sector employees have been laid off month-to-date making November the worst month of the year for layoffs as Technology companies prepare 2023 budgets. Q4 2022 could rival Q2 2020 when more than 60,000 Technology sector employees were laid off. Q4 2022 is tracking at approximately 37,000 Technology sector employee layoffs. Our … Continue reading Tech Layoffs Are Spiking
Equity indices have rallied today as reported Headline and Core CPI increased by "only" 7.7% and 6.3% Y-O-Y respectively. Many Technology names are up double-digit percentages today on this macro news despite the fact that many companies are cutting heads (it's not just CRM, LYFT, META, MSFT, NFLX, RDFN and SHOP), given the weak economic … Continue reading Sell This Rally