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Why this round of tech layoffs may be different

In this article:
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Yahoo Finance's Allie Garfinkle joins the Live show to break down the recent tech layoffs and why this round will differ from others.

Video transcript

BRIAN SOZZI: All right, the workforce is shrinking at Coinbase and so are the offer letters for supposed new hires as other workers get laid off. Yahoo Finance's Ali Garfinkel has been digging into this one for us. Ali?

ALI GARFINKEL: So I spoke to a worker from Coinbase who'd been laid off and it caught her off guard, Brian. She actually was on medical leave when she got an email telling her that she'd been laid off, and it marks the end of what had started as a really optimistic period in her career. She joined Coinbase in 2020 right before the pandemic, and she told me it was the best interview process she'd ever had. And before it went remote, the other thing she said, Coinbase's culture was amazing, but she describes a shift after things went remote.

Tensions were escalating, and she was feeling less and less like the company was handling the pandemic well. So one of the most striking things she told me, when push comes to shove, Brian, is that when she was laid off, she was scared, of course, but she was also relieved. The group of people she was with actually cheered. And this is one person's experience, of course, but I think it's an interesting snapshot of what it's like getting laid off right now.

BRAD SMITH: Wow. OK, so what makes this round of tech layoffs different from ones we've seen in the past?

ALI GARFINKEL: Yeah, that's a great question, Brad. And the thing to take away about that is that this is a macroeconomic story, though this wave of layoffs hitting companies is about companies that are getting slammed by rising interest rates, Better, Robinhood, Coinbase. And this is sort of actually a sharp contrast to the first round of tech layoffs that we saw really early in the pandemic. I'm sure you guys remember.

Those layoffs were happening at companies that had been massively affected by shelter in place, Tripadvisor, Airbnb, Uber, and that period wasn't very long. It was about three months. Of course, these two rounds are not completely dissimilar. They've both been underscored by really difficult fundraising environments. But experts I've been speaking to say that this wave of tech layoffs is definitely distinct.

JULIE HYMEN: I'm also curious, and sorry to put you on the spot here.

ALI GARFINKEL: Yeah, sure.

JULIE HYMEN: Are these people finding new jobs? And if they are, how quickly are they finding new jobs? Or are they destined to, now with the economy slowing down, be out of work for a while.

ALI GARFINKEL: It's actually-- that's a really interesting question, Julie, for a couple of reasons. The first is people are talking about this as similar to the dot-com bust, right? And it's similar in the way investor expectations have been revamped. But these people actually are getting jobs and doing interviews. The worker I spoke to actually had a bunch of interviews scheduled for today, for example. And to me-- I asked an expert about this as well, and the thing that it underscores is that tech is still really essential. There are still opportunities. So despite these layoffs, the reshuffle is happening. People are finding jobs.

JULIE HYMEN: Interesting.

BRIAN SOZZI: Really helpful insight. Ali Garfinkel, thanks so much.

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