Tech sector layoffs are on the rise

How does the job market look these days for workers in Indiana’s tech sector? It’s complicated.

Tech has hit a well-publicized slump, and within the last few months, layoffs have hit big companies like Netflix and Coinbase as well as smaller firms like Zionsville-based 120Water, Indianapolis-based Casted, and Terminus, which is based in Atlanta but has an employee base and its CEO in Indianapolis.

Companies that had been in rapid growth mode, many of them fueled by venture capital funding, are now hitting the brakes as funders become more cautious. But at the same time, plenty of companies are still in hiring mode—at least for now.

“It’s been pretty bimodal,” said Wes Winham, co-founder and CEO of human-resources technology firm Woven Teams. The Indianapolis-based company helps companies hire software engineers, so it has direct insight into the market for tech workers.

Marketing-tech firm Terminus confirmed to IBJ via email on June 3 that “a small percentage of the organization was laid off in a company restructuring.” The company declined to say how many people lost their jobs or how many of them were in Indianapolis.

As of last fall, the Atlanta-based company had more than 300 employees, about a quarter of whom were based in Indianapolis. Terminus landed $90 million in venture funding in February 2021.

Among those affected by the Terminus layoffs was Caitlin Matchett of McCordsville, who had worked there as a partner success manager. Matchett said she had heard the company cut about 15% of its workforce in late May but didn’t know the specifics.

Searching for work

Matchett said she is looking for a similar position and has had good results from her networking activities over the past several weeks. After posting on LinkedIn about her layoff, Matchett said she was flooded with responses from people offering both moral support and potential job leads.

“I definitely have seen a lot of [the type of job] I’m looking for,” Matchett said. “There’s just so much opportunity out there.”

Matchett said she’s had a lot of conversations and a few job interviews. While she hasn’t yet had any job offers, she has walked away from some potential opportunities that she didn’t think would be a good fit.

Matchett said she loves the small, scrappy startup environment that she experienced at Indianapolis-based Sigstr before Terminus acquired the company in late 2019.

But as she searches for her next job, Matchett also said she’s paying more attention to a company’s venture funding and financial status—things she might not have asked about before. “I want to make sure it’s a good foundationally stable place for me to put my feet down.”

Terminus is among a handful of local companies known to have cut positions in recent weeks.

Former employees of Indianapolis-based content marketing and podcast tech company Casted have posted on LinkedIn about being laid off. So have former employees of 120Water, which offers a digital platform for municipalities, utilities and other users to monitor water quality.

IBJ was unable to reach either company for details about the layoffs.

Job market tightening

Another local job seeker, Andrew Lantz of McCordsville, also said he’s seeing lots of opportunities—though he senses things have shifted in the weeks he’s been on the market.

Lantz worked remotely for a California-based tech company until this month, when he and about half of his co-workers at the 35-person company lost their jobs. Lantz, who had worked for the company as a senior onboarding specialist for new customers, got the news in early June. His last day on the job was June 15.

As recently as a few weeks before the layoffs were announced, he said, the company told employees it did not have plans to reduce its staff.

“It was definitely a big surprise,” said Lantz, who had been at the company since mid-October. “They said it [the layoff] was completely due to economic concerns.”

The company allowed Lantz to spend his last two weeks looking for a new job. He’s looking for another remote job that’s similar to his former position and said he’s optimistic about finding it.

Over four days last week, Lantz said he’d had nine interviews ranging from phone screenings to third-round interviews. “I’ve had great traction so far. There are a ton of opportunities out there.”

But Lantz said he has seen signs that things are tightening up. He typically applies for jobs via LinkedIn, and through that portal, he can see how many other applicants have applied for a given position and how highly his application ranks among the others. Starting around the first full week of June, Lantz said he’s noticed more people applying for the jobs he’s seeking. He’s also noticed fewer openings posted by the 30- to 40-person startups that he’s been targeting, while bigger companies seem to still be hiring at the same pace.

“It does make me want to find something relatively quickly,” Lantz said.

Nate Spangle, head of community at Indianapolis-based Powderkeg Ventures LLC, said he’s seen a definite softening in the job market, both nationally and in Indianapolis, although late last week he still described hiring activity as robust.

The job market “was crazy and now it’s like a little less crazy,” Spangle said. Powderkeg’s online platform helps connect tech startups, investors and jobseekers in non-coastal markets around the country.

On a scale of 1 to 10, Spangle said, the job market in the tech sector had been at an off-the-charts 13 until more recently. Now, he’d peg it at a 10.

Spangle said he saw a slowdown in hiring activity on a national level right before Memorial Day weekend, and the slowdown started showing up in the Indianapolis area early this month.

Powderkeg is free for jobseekers. The site earns its revenue from the software tools it offers to help employers with branding and talent attraction. As of last week, Powderkeg had more than 1,000 jobs that it was trying to help those employers fill.

“There is a large number of companies still actively hiring,” Spangle said.

Powderkeg launched a new job board on its website last week specifically because of the recent layoffs in the tech sector. Powderkeg’s focus is on helping people build connections and find the right cultural fit—but the company also wanted to offer something for the growing number of people who might quickly need to find a new job, Spangle said. “We’ve seen an influx of job seekers.”

Wes Winham, the co-founder and CEO of Indianapolis-based human-resources technology firm Woven Teams, said he’s also seen some mixed dynamics in the job market recently.

Woven is plugged into the tech job market because the company’s product helps companies hire software engineers more easily. Software engineers typically must complete skills testing as part of the interview process, and Woven’s platform provides a place for applicants to do that testing—which means the hiring companies don’t have to expend the time and effort to conduct the tests in-house.

Winham said Woven customers who might have been planning to hire 100 to 200 people may now be planning to hire only 10—or have frozen hiring altogether.

Companies that are on the verge of going public, often fast-growing “unicorns”—privately held companies valued at over $1 billion—have been most impacted by the hiring slowdown, Winham said.

Reliant on venture funding

Many of these companies haven’t yet become profitable, Winham said, so they rely on venture funding to fuel their growth. As the tech sector has slowed and investors are less inclined to pony up new investments, the companies are finding the need to pare back their spending.

At the same time, Winham said he’s seen steady hiring at companies in non-tech sectors. “A lot of them are using this as an opportunity to expand.”

Banks and health care companies need tech talent too, Winham said, but when the hiring market was so hot, these types of companies weren’t always able to compete with pure tech companies.

Now that hiring has slowed in the tech sector, Winham said, non-tech companies are stepping in to scoop up talent. “These more traditional companies, the smarter ones are seeing it as an opportunity.”

Woven has seen its own revenue growth slow down as a result of the softer job market. Winham said first-quarter growth was down as compared to the fourth quarter of 2021, and the second quarter is expected to be slower than last year, as well.

Winham said he expects growth to accelerate in the third and fourth quarters—in part because the company is working to attract more customers outside of the tech sector.•