Tech layoffs – they’re happening in these ASX companies in 2023 and they’re brutal

Nick Sundich Nick Sundich, January 12, 2023

Tech layoffs look like they’re increasing before they’re decreasing. And even ASX tech stocks have not been immune, with the latest company to cut staff announcing the move this morning.  

 

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Limeade set to cut 15% of its staff

Limeade (ASX:LME) is a Seattle-based company that provides employee well-being software. It has failed to garner much support from Australian investors, retreating from $1.85 at its December 2019 IPO to $0.30 today. 

And although tech layoffs had not occurred at this company yet, this morning its management announced a 15% cut to staff numbers. Staff to go included CFO Todd Spartz, who the company said was pursuing another opportunity in the corporate sector. Limeade anticipates annualised savings of ~US$7m.

 

Tech layoffs have hit other companies too

Tech layoffs in Australia have been most prominent at non-listed companies, especially those in the crypto space. Nevertheless, there have been a few ASX companies to have let go of staff. 

One of the more prominent cases is Whispir (ASX:WSP), which axed 30% of its workforce last November. The move was designed to save $14.3m a year as it sought to become cash flow positive at long last. A handful of other companies announced plans without giving specific to details, including Catapult (ASX:CAT) and Airtasker (ASX:ART). 

And several BNPL companies entirely closed offshore offices to cut costs. Zip (ASX:Z1P) was the most notable, pulling the shutters down on its Singapore and UK offices.

 

A bad sign for companies

All companies will spin layoffs as a good thing, saying these will provide cost savings and help them reach profitability.

But for companies that are not profitable, wide scale layoffs indicate that they are in a fight for survival. And even if the companies survive the current round of tech layoffs and emerge stronger, it won’t be as easy or quick to find new employees as it is to lay them off.

 

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