97,000 Job Cuts Last Year, 63% Started Their Own Companies

Tech companies let go over 97,000 employees in 2022, forcing–or inspiring–many of the laid-off workers to start their own companies.

According to a report from placement services firm Challenger, Gray & Christmas, the 2022 figure marked a 649% increase from the roughly 13,000 tech industry job cuts in 2021. This makes the technology sector the leading industry in job cuts, followed by the automotive sector, which cut 31,000 workers last year.

“The overall economy is still creating jobs, though employers appear to be actively planning for a downturn. Hiring has slowed as companies take a cautious approach entering 2023,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said.

Various tech giants continued their layoff spree this year, with Microsoft cutting 10,000 workers, Google cutting 12,000 jobs, and Amazon letting go of 18,000 employees, among others, according to layoff tracker Layoffs.fyi.

Zoom, Paypal, GitHub and Google’s parent company Alphabet also announced thousands of job cuts earlier this year.

On the brighter side, the layoffs prompted many of the workers to start their own companies after raising the necessary capital.

In a survey of over 1,000 laid-off tech workers, finance company Clarify Capital found that 63% of tech workers have started their own company post-layoff, and 58% of those who started a company after a layoff feel better about their new job security.

“Nearly 1 in 4 tech workers couldn’t get hired by another company post layoff,” Clarify stated, adding that the workers who started a company reported a yearly salary increase of $13,000 on average.

Further, 83% of the tech workers surveyed reportedly launched new companies in the computer or IT industry, with 91% saying that their new company competes with their previous companies.

“For 40% of respondents, the idea to start a company came between six and 12 months after getting laid off,” Clarify wrote. “Nearly one-third had their lightbulb moment even sooner — in under six months — and the rest took a year or more to decide that owning a business was the next logical step in their career.”

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