Many investors have warned that the booming market for tech stocks may be a sign of a bubble. Now some say that recent layoffs by several major tech companies and even some hot startups may be a sign of a coming market shift.
Recent companies with significant layoffs include Microsoft, Twitter and Snapchat, according to Business Insider. While some suggest that the layoffs are healthy signs of belt-tightening, others suggest they may be early warning signs of a bubble about to burst.
Layoffs are coming from companies old and new. In addition to Microsoft, Hewlett Packard earlier this year slashed thousands of jobs. Internet darlings like Groupon and Living Social also recently cut jobs, along with other young, mobile tech industry companies.
For example, Flipagram, a photo story-telling startup backed by deep-pocketed investors announced 20m percent layoffs last week. The restaurant discovery app Zomato, a startup that bought out Urban Spoon, recently cut 300 jobs.
Twitter’s announcement that it was cutting eight percent of its workforce was less surprising, following its recent merger with Square. But with Square’s upcoming IPO, some investors wonder about the company’s chances, given it has lost hundreds of millions of dollars over the past three years.
In addition, many still fear the broader implications of a bursting bubble for businesses reliant on tech companies’ successes, like real estate, restaurants, and other businesses.