The City of London is keen to attract the next wave of fintech start-ups
(Picture: Shutterstock / ZGPhotography)It has been the worst month for tech layoffs since the beginning of the pandemic with scores of US giants letting thousands of staff go over January.
First out of the gate was cloud computing business and Slack owner Salesforce, which said it was cutting about 8,000 jobs at the beginning of the month. Soon after Amazon said it was bringing its total layoffs to 18,000.
After that it was the turn of Microsoft to let go of 10,000 jobs, joining the likes of Google, Intel, Coinbase and many more.
All told, the tracking website Layoffs.fyi estimates there have been around 70,000 layoffs at tech firms worldwide in January alone, almost half the roughly 160,000 let go over the whole of 2022.
Internet entrepreneur Roger Lee, who set up Layoffs.fyi as a side-project during the pandemic, told the Standard it had become depressing keeping the project going lately, which has seen him having to start work as early as 5am and finish as late as 10pm to ensure the site is up-to-date with the latest cuts.
“I created the site over the weekend, and had no idea that I’d still be updating it three years later,” he said. “My wife complained that all the news I was posting was negative. I told her I couldn’t help it — this is a layoffs website!”
Lee warned he expects the wave of layoffs to continue well beyond January, exacerbated by a harsher fund-raising climate including rising interest rates that make it more difficult to borrow.
But while the headlines might be gloomy, recruitment is continuing in certain areas, notably in London’s world leading fintech sector, which appears to be remarkably resilient.
Just five of the 20 biggest London-based fintechs have had to reduce their headcount over the past six months, an Evening Standard analysis of LinkedIn data suggests, amounting to at least 250 redundancies. But many of their peers, including Zeps, Wise and Starling, are bucking the global layoff trend and have each added hundreds of new staff to their workforce in recent months.
As a whole, some 7,000 new jobs have been created by the UK’s biggest fintechs since January last year, with the lion’s share based in London. Revolut alone is responsible for almost half these new jobs, having doubled in size over the past year to 7,078 staff according to LinkedIn. And there’s no sign they’re slowing down.
Chris Yankson, head of recruitment at Revolut, told the Standard the firm is already seeking to hire another 1,700 staff. Its new graduate scheme, launched recently, saw over 3,000 applicants for just 10 places.
“People often view layoffs as the fault of the individual but it’s clear at the moment that it’s the fault of businesses over-hiring,” he said.
“You have some tech companies who thought the revenue growth they saw during the pandemic was going to be constant, but given current economic conditions they’ve discovered they’re a little overstretched.
“There has been a more cautious approach by British tech firms, who have taken a more measured strategy for recruiting new people and for whom increasing headcount isn’t seen as the only lever towards achieving growth.”
