Big Tech Layoffs Continue, Startups Yet to Follow Suit on a Large Scale
Peter Walker noted that although the wave of layoffs at Big Tech companies continues, there has not yet been a large-scale manifestation of this in private equity startups.
However, he anticipates that Q2 2026 may be challenging. Hiring at startups has noticeably slowed, and the frequency of employee turnover has significantly decreased.
This phenomenon reflects the current differentiation and adjustment period in the tech industry, where large companies continue to optimize costs while startups remain in a cautious wait-and-see phase.
Source: Public Information
ABAB AI Insight
2023-2025 Meta, Google, Amazon, and other Big Tech companies have undergone multiple rounds of large-scale layoffs. Peter Walker's observations continue his long-term tracking of the tech job market. Previously, layoffs similar to those at the end of 2022 and the beginning of 2023 were mainly concentrated in publicly listed companies, while private equity startups had already begun to scale back hiring due to a tightening financing environment.
In terms of capital flow, VC funds are still in a wait-and-see mode. Startups are controlling their cash burn rate by reducing hiring and lowering employee turnover while retaining core teams in anticipation of the next round of financing. Big Tech, on the other hand, is continuously optimizing their organizational structure using mature cash flows, investing cost savings into AI infrastructure, creating a phase of coexistence characterized by "large companies downsizing + small companies tightening."
Similar to the hiring freeze in startups following rapid interest rate hikes in 2022-2023, and the historical tech cycle where layoffs in publicly listed companies eventually affected the entire ecosystem, the current tech industry is in a transitional window from Big Tech cost optimization to comprehensive pressure on startups before Q2.
Essentially, this represents capital concentration: during economic adjustments, human capital is shifted from surplus positions to core businesses, reallocating resources from redundant departments in Big Tech and the expansion impulses of startups to lean team configurations. Mechanically, this is achieved through hiring freezes and low turnover to extend survival cycles, reserving talent and cash for a new round of AI-driven growth.
ABAB News · Law of Cognition
Large companies first lay off to clear inventory, followed by small companies tightening financing; cyclical adjustments always transmit layer by layer. Reduced hiring and decreased turnover do not indicate market death, but rather that capital is forcing all companies to become more focused. The real winter, from the noisy layoffs of Big Tech, quietly enters the quiet tightening of startups.