“Many companies will probably disappear”: mass contractions, pessimistic forecasts began in the IT sector

During the pandemic period, when people were locked home and needed delivery, entertainment and other technical solutions, the IT companies also expanded the rich. And today they turn their activities, dismissing employees and recalling work proposals. Further – worse, experts predict.
What’s happening

On Tuesday, the Coinbase cryptocurrency exchange said that she reduces 18% of the state (1100 thousand people) against the backdrop of collapse of promotions and cryptocurrencies, writes CBS News. Exchange CEO Brian Armstrong noted that Coinbase, the market value of which exceeds $ 13 billion, “grew too fast” in 2021 – it expanded to take advantage of the rampant hobby of people with cryptocurrency.

“Now we, it seems, are going into a recession after ten years of economic boom,” he says.

Coinbase abbreviations occurred the day after the Blockfi large cryptocurrency company announced the dismissal of about 250 people.
Dismissed not only in crypt

Contractions are also observed in other niches. For example, OneTrust, which is dealing with confidentiality and marketing, fired 950 employees last week, Stitch FIX – 330 employees, and ID.Me, engaged in personality testing – 130 people. The Bird transport company fired the same amount.

This is an incomplete list of abbreviations in the last two weeks. According to the Layoffs.fyi tracker, which tracks dismissal in IT, this year about 35 thousand ITSHNI have lost their jobs this year. In the meantime, many fast -growing companies change plans and stop hiring employees, calling their offers about work.

Experts noted that the “boom” of dismissal began in May: the number of announcements on the reduction of workplaces in the IT field was 10 times more than in the first four months of the year. Exchange also note the decline in the industry: on the NASDAQ, an integral shares of all the technical companies since January has lost 30% of its value, and this is the largest fall since 2007, when it sank by 48%.
And what about the tops?

Crypto companies, of course, in the “Vanguard” for dismissal, but the situation with hiring and work becomes worse in Faang. Meta and Twitter slowed or suspended hiring plans, and Netflix, Peloton and Robinhood completely dismiss employees.

What will be the future IT

The last technological collapse occurred when the bubble of dotcomes “burst” in the late 90s. For two and a half years, on the NASDAQ, those who have lost two -thirds of their value, many went bankrupt. Will the situation repeat?

Scott miners, the chief investment director of Guggenheim Partners, believes that in the coming years the technical index can fall by as much as 75%, and the famous investor Jeremy Grantem predicts that the decrease will occur by 40%.

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