Startup Layoffs Continue into December 2022

The wave of layoffs in startups and tech giants continues. According to data from Layoffs.fyi, during the period of December 1-26, 2022, this sector laid off approximately 8,800 people worldwide.

Cumulatively, from the beginning of the year to December 26, 2022, the number of employees laid off from startups and large technology companies has reached 152,000. The largest wave of layoffs occurred in November 2022, as shown in the graph.

The phenomenon of layoffs in startups and tech giants is influenced by many factors, one of which is the increase in the central bank's benchmark interest rate.

In the United States (US), for example, according to The Guardian, many US startups are currently burdened by the rising The Fed interest rate.

"If small businesses in the US have a loan of US$1 million, their interest burden will increase next year from US$70,000 to US$110,000," said The Guardian on Sunday, November 25, 2022.

"Startups will not be able to pay off their loan burden. We have already seen this in the technology industry, where venture capitalists and other investors are withdrawing their funding from startups that are not profitable, resulting in the layoff of tens of thousands of people and the closure of hundreds of companies," it continued.

Several established startups and technology companies in Indonesia have experienced similar situations, one of which is JD.ID. In mid-December 2022, this e-commerce company laid off 30% of its workforce due to macroeconomic conditions.

"The challenges of rising central bank benchmark interest rates on a global scale, and the ongoing geopolitical turmoil between Russia and Ukraine, are indeed overshadowing the business of startups and e-commerce until the end of 2022," said JD.ID management in its press release on Tuesday, December 13, 2022.

"The company needs to take adaptive steps to meet the challenges of rapidly changing business conditions. One step taken by management is to streamline the company so that it can continue to adapt to changes," it continued.