Posted 53 days ago
In the first few months of 2022, a wave of layoffs swept across American business.
The cuts stem from slower business growth, paired with rising labor costs.
Even major tech companies like Facebook parent company Meta are facing contractions.
Layoffs are sweeping across American businesses in the first few months of 2022. Recent startups like Peloton have already laid off thousands of employees this year. Even traditionally layoff-resistant companies like Netflix are making cuts. The reason, broadly, is twofold: Business growth is slowing, while labor costs are increasing. The combination is causing American companies across a variety of industries to slash headcount.Here are some of the most notable examples so far:
Vishal Garg is the founder and CEO of Better.com. He was responsible for laying off hundreds of people right before the holidays in 2021.
Starting in late 2021 and continuing through the first several months of 2022, mortgage startup Better.com laid off approximately 4,000 people.The first wave started right before the holiday season in 2021, when CEO Vishal Garg laid off "hundreds" of people.Garg told employees during a
call that the company, "lost $100 million last quarter," which he said, "was my mistake." He then said the layoffs shouldn't have happened right before the holiday, but, "three months ago." Better followed up with another 3,000 layoffs in March, and is now accepting voluntary layoffs in some departments.
The weight-loss app maker Noom recently laid off hundreds of coaches, Insider reported last month — part of a bigger-picture pivot for the company toward more video-based coaching.The company, through its app of the same name, pairs dieting with personal coaches to achieve weight loss for users. Interactions with those coaches were often through text, which users critiqued as "canned advice." Some coaches told Insider they were responsible for giving advice to hundreds of users at any given time.Going forward, Noom is focusing on offering users scheduled video calls with coaches.
In February, Peloton fired over 2,800 people — including 20% of its corporate workforce — because of an ongoing downturn in the company's business.Peloton faced a major setback after home-fitness products spiked in popularity during the height of the coronavirus pandemic in 2020.With gyms reopening as vaccination rates increased, Peloton's business took a huge hit: The company's market value has dropped from $50 billion last year to around $6 billion as of early May 2022.
Thrasio, the company known for creating the Amazon aggregator market, is laying off an unknown number of people. Additionally, the company's CEO and founder, Carlos Cashman, is stepping down from leadership. Amazon aggregators work by identifying product leaders on Amazon, then buying the companies that make those products and consolidating them under one umbrella company. In a memo sent to employees, Thrasio leadership said the layoffs were due to the company's "hypergrowth" in acquiring companies. "At times we have been acquiring a new company almost every week," the memo said, "and running hard to build the infrastructure to support this growth."Two sources told Insider the layoffs could impact up to 20% of Thrasio's staff.
During the pandemic, so-called "meme stocks" from GameStop and AMC exploded. Much of that explosion in stock value was driven by accessible trading platforms like Robinhood.And while new users piled in during the pandemic, Robinhood hired rapidly. Between 2020 and 2021, Robinhood staff grew dramatically: from 700 people to around 3,800, according to CEO Vlad Tenev. But that growth was apparently too much and too fast, and Robinhood was forced to slash headcount by 9% — more than 300 people altogether."This rapid headcount growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal," Tenev said in April. "After c... (Read more)