Despite indications of an improving economy and continued investment in the tech sector, the tech industry, including contech firms, has faced a challenging year. According to insights, U.S.-based tech companies have laid off over 155,589 workers in 2023, a significant increase from the 93,000 tech layoffs in the previous year. Notable tech companies like Amazon, Alphabet, and Microsoft led the layoffs.
Contech firms have not been immune to the economic downturn, even though they have managed to secure funding. The uncertain economic conditions resulting from the Covid-19 pandemic and geopolitical events like the Russian invasion of Ukraine have contributed to their struggles.
One example is Matterport, a digital twins specialist, which laid off 30% of its workforce, about 170 people, to streamline operations. Similarly, Autodesk, a design software giant, cut about 250 jobs in February. Built Technologies, a construction fintech firm, also experienced layoffs in multiple rounds this year.
The challenges faced by tech and contech firms can be traced back to the impact on their clients’ customers. For instance, Amazon’s cutbacks on office construction have affected the construction industry. Additionally, the nonresidential building planning index has experienced a decline, negatively affecting contractors. Lendlease and Cusi Construction are among the companies that have laid off staff due to these unfavorable conditions.
Despite some positive economic indicators and ongoing investments, the tech industry, including contech firms, has experienced a challenging year marked by a significant increase in layoffs. Economic uncertainty and other external factors have played a role in the struggles faced by these companies and their clients, leading to cutbacks in workforce and construction projects.