FTFL - Layoffs? Don't Talk About Layoffs!

This article appeared in our December 2022 issue of From the Front Lines, Bowen’s roundup of news and trends that educate, inspire and entertain us. Click here to subscribe. 

Each year as we near the end of the NFL regular season, our favorite coaching soundbite tends to make the rounds in our Slack channel. This year, Jim Mora’s infamous “Playoffs? Don’t talk about playoffs!” rant from 2001 inspired us to dig into some recent layoff news across the tech industry.

After a decade of unfettered headcount growth, Big Tech has clearly slammed on the brakes, as 7 of the 13 headcount reduction announcements came within a 10-day period in November.

What does this all mean for growth tech M&A? How do companies go from cutting headcount internally to adding headcount inorganically?

We thought the best way to tackle this riddle was to let history be our guide. While one might expect a subsequent M&A moratorium after layoffs, the data from these top 15 companies’ prior layoffs indicate no correlation between a layoff and transaction volume in the following year.

The data below shows that some were up and some were down, proving M&A is an imperfect and opportunistic sport and a missed opportunity is just that.