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Key Takeaways
- In a letter to employees, Pluralsight CEO Aaron Skonnard announced the company would be laying off employees, effective immediately.
- Layoffs have become common in 2022, especially in the tech industry.
- Mixed economic data makes it hard to determine if more layoffs are coming.
Pluralsight is the latest tech company to announce layoffs. As with many tech companies right now, the education giant said sales have been weak and are getting worse as the end of the year approaches.
Here is what is happening at Pluralsight and if the trend of layoffs is only just beginning.
Who is Pluralsight?
Pluralsight is a Utah-based tech company that provides educational programs for companies and individuals working in the tech field. It helps companies improve their workflows.
The company assists other companies in developing their workforce’s education in specific areas of software development and allows employers to find bottlenecks in their productivity.
Pluralsight offers video and instructor-led educational programs. Plus, its workflow software analyzes how work is produced through diagnostics and metrics.
The goal of Pluralsight is to create an educated workforce and provide employers with tools that avoid workforce burnout while meeting delivery dates. The company has been called a tech unicorn because it’s a private startup that quickly reached $1 billion in value after it launched.
Why is Pluralsight laying off 20% of its workforce?
Pluralsight laid off around 400 employees in response to challenging economic times. Its income relies on a subscription-based revenue model for individuals and businesses. A subscription is paid monthly or annually, and accounts are billed per user.
The company has lost many subscribers since early 2022 and continues to lose revenue.
The CEO of Pluralsight stated to employees in a letter that it had been facing significant challenges, which worsened during the fourth quarter. As a result, it has to restructure and downsize to survive.
More details about the layoffs were given to employees in a town hall meeting on December 13, but details of that meeting haven’t been publicized. The company is following in the steps of other tech companies that are laying off employees to improve profitability and ensure survival.
Other companies laying off workers
Tech companies began laying off employees in 2022 due to revenue losses and over-hiring during the boom period. The layoffs are continuing in December and are primarily from tech industries. However, other sectors are also laying off people.
Some of the companies laying off staff include:
- Twilio: 850 employees
- DocuSign: 670 employees
- Oracle: 201 employees
- Microsoft: 1,000 employees
- F5: 100 employees
- Stripe: 1,100 employees
- Amazon: 10,000 employees
- Meta: 11,000 employees
- HP: Up to 6,000 employees
- Cisco: 4,100 employees
- Salesforce: 950 employees
- Zendesk: 350 employees
- Twitter: 3,750 employees
- Ford: 3,000 employees
- Walmart: 1,500 employees
This is not a comprehensive list of companies laying off employees, but it does illustrate that most layoffs are from the tech industry.
Why the trend of layoffs is something to watch
Job losses and an increase in unemployment are some indicators of a recession forming. However, job losses tend to be spread across different industries instead of one industry alone.
The current wave of layoffs is primarily from the tech industry, although it does affect non-tech workers employed by tech companies too.
The economic data and indicators that signal a recession are mixed. While there are plenty of stories of tech layoffs, the unemployment rate has remained steady. In November, the unemployment rate remained unchanged at 3.7%.
Additionally, inflation is still high, though the rate of increase seems to be slowing. The Producer Price Index came in at 0.3%, slightly higher than the estimates of 0.2%. The Consumer Price Index rose 0.1% for November, less than the estimated 0.3%.
Black Friday was positive news for retailers, but questions remain about how the holiday shopping season will turn out. Heading into year-end, many retailers warned of soft sales, preparing investors for weak quarterly results.
It’s too soon to tell if the layoffs in the tech industry are a sign of bigger things to come. With the threat of a looming recession, many more companies could lay off workers as we head into 2023.
Historically, many firms avoided lay offs around the holidays, but this is no longer the case. December tends to be the second-highest month for layoffs. The month that experiences the most layoffs is January.
What is certain is that tech workers are finding new jobs relatively quickly. Many laid-off tech workers have found new positions within three months of being laid off.
In many cases, these individuals report higher pay in their new position.
Bottom Line
Keeping an eye on the layoff trend is wise, especially as it relates to the economy as a whole and potential investment opportunities. The question is whether the layoffs are mostly isolated to the tech industry or if they will have a domino effect across the remaining industries.
While there have been some non-tech industry layoffs, it is not widespread enough to cause concern as we head into 2023.
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Source: https://www.forbes.com/sites/qai/2022/12/22/tech-layoffs-update-unicorn-pluralsight-lays-off-20-percent-of-staff-december-2022/