Tech Roundup: Why are unicorns firing so many people?

This week: Tech companies’ wave of layoffs hits Brazilian startups. 5G solutions look to generate billions in revenue for the Brazilian economy. Biotechnology grows in Brazil while the use of insecticides falls.

Layoffs at Brazilian tech startups

Less than six months after becoming a unicorn, Brazilian social commerce startup Facily – which works as a digital hypermarket for collective purchases – carried out a series of layoffs. A former employee published a list on LinkedIn of people who were fired.

• As of Thursday morning, the list was 119 names long. However, up to 400 employees – of which 150 work in IT – could be cut, per newspaper O Estado de S.Paulo.

Trend. Facily is the third Brazilian unicorn to drastically reduce its staff in recent weeks. Real estate giant QuintoAndar fired 4 percent of its team, while competitor Loft laid off 159 employees and relocated another 52.

Shrink to grow. In a statement, Facily said that it “seeks constant evolution and efficiency to improve the experience of everyone who is part of and interacts with the company” and that “changes, including to personnel, are therefore necessary.”

• “It’s a natural move. At first, these startups expand strongly with an absurd number of employees in search of market share,” Guilherme Lichand, co-founder of Brazilian edtech Movva, tells The Brazilian Report.
• “But in a second phase, when they are already more consolidated, they begin a process of reorganizing the company so that they finally become profitable for shareholders. And then these companies start to dry out their payroll,” he added.

Yes, but … That wave of layoffs may not be so natural. Per website The Information, U.S. tech companies have also undertaken similar moves, due to a combination of high interest rates and global inflation (further exacerbated...