Tech roundup: Turning layoffs into opportunities

Welcome to our Tech Roundup, where we bring you Brazil’s biggest stories on technology and innovation. This week: Mass layoffs are likely to continue in 2023 among large companies, but there will still be opportunities in early-stage startups.  

Turning layoffs into opportunities

The year began with a new wave of layoffs at startups and tech companies in Brazil — including the mass firing of more than 150,000 people by global giants with offices in the country, such as Amazon, Microsoft, Meta, and Google, the impact of which is still unclear. 

State of play. At least 4,200 people have been laid off in the tech sector in Brazil since last year, according to data collected by the newspaper O Estado de S.Paulo. The number is probably much higher, but other sources are unreliable because they haven’t cross-checked stats with companies and former employees.

• Of Brazil’s 24 unicorns (startups valued at USD 1 billion or more), 19 have made major staff cuts in recent months to reduce costs.
• Moreover, official Caged formal work data shows that in December 2022, the number of vacancies in information technology retreated for the first time since 2020; 3,630 jobs were lost out of a stock of 1.13 million.

Backdrop. Layoffs are the most human and painful side of a challenging phase for startups that, according to investors and founders, is just beginning. Banks don’t expect to see light at the end of the tunnel until after 2024, especially in Latin America.

• For the ecosystem, this means putting another six months on top of that forecast, cutting expenses and extending runways (the amount of time a startup can keep operating before it runs out of money)...