Tech Startups Hemorrhaging Jobs During Pandemic

The COVID-19 pandemic has proven especially destructive to tech startups, with more than 69,000 workers laid off.

And what’s worse, many tech startups likely won’t survive the pandemic, says BuyShares, a U.K.-based brokerage firm. Transportation, finance and travel industry startups alone cut 31,000 jobs globally in four months.

In March, the number of laid-off employees was more than 9,600, according to Statista and Layoffs Tracker data. In the next 30 days, this number nearly quadrupled, topping 36,000 by the end of April.

Statistics show the number of job losses reached nearly 62,000 in May. And since then, another 7,600 jobs were lost, with the combined number approaching 70,000 last week.

Hardest-Hit Startups

With more than 14,600 job losses in this period, the tech startups in the transportation industry have taken the hardest hit. The finance industry ranked as the second most-affected sector, with nearly 8,500 employees losing their jobs.

Startup companies in the travel sector laid off almost 8,200 workers due to the outbreak, ranking as the third most-affected industry. Statistics show startups from the retail, food and consumer industry cut more than 19,100 locations in the last four months. The real estate, fitness and marketing industry follow with approximately 3,500, 3,000 and 2,600 displaced workers respectively.

Analyzed by location, San Francisco Bay Area startups are the most affected by the pandemic, with more than 25,500 displaced workers between March and July.

For many startups, surviving the COVID-19 pandemic could be quite challenging, according to BuyShares.

Cybercriminals Target Job Seekers

In the meantime, COVID-19-induced job losses sent people to online job boards looking for work and unknowingly making themselves targets for cybercriminals. That’s according to the National Cyber Security Alliance (NCSA) and the FBI.

This year alone, the Internet Crime Complaint Center (IC3) saw a 20% spike in scam-related complaints, with victim losses exceeding $25 million, or $3,000 per victim.

Fake job or hiring scams occur when criminal actors deceive victims into believing they have a job or a potential job. Criminals leverage their position as “employers” to persuade victims to provide them with personally identifiable information (PII) or to send them money.

Daniel Eliot is the NCSA’s director of education and strategic initiatives. He said the pandemic has created an ideal scenario for cybercriminals.

NCSA’s Daniel Eliot

“Mass unemployment, combined with hiring freezes, and the fact that a majority of people are spending their time in lockdown on the internet, has created an environment ripe for criminals to take advantage of people who are online and eager to get back into the workforce,” he said. “In these moments of desperation, they are more likely to fall victim to a criminal’s enticing offer. It really comes down to being hypervigilant and doing your research on the opportunity before submitting any information.”

The NCSA and FBI have issued a list of tips for job seekers to protect themselves from cybercrime. Among the tips:

• Conduct a web search of the hiring company using the company name only. Also, check for spoofed websites. And if the company is well known, contact it to confirm the legitimacy of the job posting.
• Never send money, provide credit card or bank account information to an employer.
• Pause before supplying sensitive information. Before entering PII online, make sure the website is secure by looking at the address bar. The address should begin with “https://”, not “http://.”