- 78% of major public tech companies conducting layoffs still showed strong financial health.
- California alone accounts for 37% of all US tech layoffs (238,658 people).
- The hardware sector averaged over 3,000 layoffs per company.
A new Kaplan Group report reveals that more than 646,000 tech jobs were cut from 2022 to 2025, yet 78% of major public tech companies making these cuts remained financially strong—pointing to strategic decisions. This wave of layoffs is reshaping collections risk and business relationships across the tech sector, with California alone accounting for 37% of all U.S. tech layoffs and vulnerabilities emerging throughout industry supply chains.
Trends since 2022
The tech sector’s layoffs have been both broad and deep, with public, private, and PE-backed companies all affected. Notably, 78% of major public tech firms conducting layoffs still showed strong financial health. This signals that many reductions were strategic moves—aimed at cost control and positioning for uncertainty, not simply responses to financial distress.
- Total people laid off since 2022: 646,094
- Total companies involved: 1,573
- Total layoff events: 2,165
- Average layoffs per event: 298
Top States Impacted
- California: 238,658 layoffs (434 companies)
- Washington: 59,577 layoffs (41 companies)
- Texas: 34,900 layoffs (27 companies)
- New York: 33,515 layoffs (153 companies)
- Massachusetts: 16,220 layoffs (61 companies)
Top Countries Impacted
- United States: 449,832 layoffs (935 companies)
- India: 42,204 layoffs (143 companies)
- Germany: 29,924 layoffs (60 companies)
- United Kingdom: 19,402 layoffs (54 companies)
- Sweden: 17,959 layoffs (16 companies)
Top Industries Affected
- Hardware: 81,428 layoffs (26 companies)
- Other tech sectors: 70,510 layoffs (110 companies)
- Consumer tech: 66,805 layoffs (87 companies)
- Retail tech: 64,631 layoffs (136 companies)
- Transportation tech: 49,070 layoffs (85 companies)
The hardware sector stands out, with the highest average layoffs per company—over 3,000—pointing to major business model shifts and supply chain disruptions.
Company Stage: Public, Private, and Startups
- Public companies: Account for the majority of large layoff events
- Private equity–backed firms: Also significantly affected
- Startups: Show more resilience, with smaller, less frequent layoffs
Public and PE-backed companies are making large, strategic cuts, while startups are more likely to trim selectively or avoid layoffs altogether.
Financial Health of Public Tech Firms
We analyse the financial of 32 major tech companies with available financial data:
- 78% of public tech companies laying off staff still report strong financial health
- 21 of 32 major firms: DSO over 180 days
- 6 companies: Negative working capital
Healthy balance sheets don’t always mean prompt payments. High DSO and negative working capital are red flags for collections risk, even among industry leaders.
Collections Risk
The surge in tech industry layoffs from 2022 to 2025 has far-reaching consequences for collections, cash flow, and business credit risk. Here’s what matters most for anyone concerned about getting paid:
Payment Delays and Defaults Are More Likely
- Layoffs signal financial stress or strategic cost-cutting. Even when companies appear financially healthy, workforce reductions often mean tighter budgets, shifting priorities, and a greater focus on conserving cash.
- Vendors and creditors may face slower payments. Companies undergoing layoffs frequently delay accounts payable, renegotiate terms, or prioritize payments to critical suppliers, increasing the risk of late or missed payments.
High Days Sales Outstanding (DSO) Is a Warning Sign
- 21 out of 32 major public tech companies had DSO over 180 days. This is well above healthy norms and signals potential collection issues.
Negative Working Capital and Liquidity Concerns
- Six major tech companies reported negative working capital. This means they owe more in the short term than they have in liquid assets, raising the risk of payment delays or defaults.
- Liquidity crunches can hit even large, well-known firms. Layoffs are not limited to struggling companies; many with strong balance sheets are still tightening cash outflows.
Industry and Regional Concentration Increases Risk
- Hardware and consumer tech sectors saw the largest layoffs. These industries are undergoing major restructuring, which can disrupt payment cycles and increase the risk of non-payment.
- California and other tech hubs are most affected. If your receivables are concentrated in these regions, your exposure to collections risk is higher.
Company Stage Matters
- Public and private equity–backed companies led in large layoffs. These firms may have more resources, but their restructuring can still disrupt payment patterns.
- Startups, while more resilient to layoffs, may have limited reserves. This can also increase collections risk if their funding environment tightens.
When tech companies lay off workers, it’s not just an internal issue—it ripples through the entire business ecosystem. Vendors, service providers, and creditors may all experience slower payments, more disputes, and a higher risk of bad debt. Monitoring payment patterns, diversifying client portfolios, and proactively communicating with at-risk clients are essential steps to protect your cash flow and minimize collections risk in this environment.
Methodology
Data Sources
Primary Dataset:
• Primary data: 2,165 layoff events from Layoffs.fyi (2022-2025)
Financial Data:
• Financial data: SEC quarterly filings (10-Q/10-K) from 32 public companies
Key Methodological Elements
• Multi-factor financial health scoring system (0-4 scale)
• DSO calculation: (AR ÷ Revenue) × 365 days
• Geographic classification by company headquarters
• Statistical analysis with 95% confidence intervals
• Cross-validation against news sources and company announcements
Financial Analysis Framework
The methodology specifically details how SEC quarterly filings were used:
- SEC EDGAR Database: 10-Q and 10-K forms from Q3-Q4 2024
- Financial Metrics Extracted: Balance sheet items, income statement data, cash flow metrics, and operational indicators
- DSO Calculation: Using accounts receivable and revenue from quarterly reports
- Financial Health Scoring: Multi-factor system (0-4 scale) incorporating liquidity ratios, profitability metrics, cash position, and working capital analysis
Limitations
Data Coverage Limitations:
- Layoffs.fyi may not capture all layoff events, particularly smaller reductions
- Private company financial data not available for comprehensive analysis
- Some international layoff events may be underrepresented
- Timing differences between layoff announcements and actual implementation
Financial Data Constraints:
- SEC filing data limited to 32 publicly-traded companies
- Quarterly data may not reflect real-time financial conditions
- Financial health scoring based on traditional metrics may not capture all risk factors
- DSO calculations assume consistent revenue recognition practices
Temporal Considerations:
- Study period (2022-2025) represents specific economic conditions
- Layoff timing may not align with financial reporting periods
- Strategic decisions may have longer implementation timelines than captured
