As of early 2025, the tech industry, while grappling with widespread layoffs — a trend that began in 2022, continues to demonstrate resilience. With 428,449 tech workers losing their jobs in 2022 and 2023 combined, the downsizing shows no signs of slowing.
According to Layoffs.fyi, 47 tech companies have already laid off over 11,663 employees in January and February of 2025. This includes major companies like Meta, Amazon, Workday, Sonos, Asana, and Salesforce, alongside startup shutdowns including Cushion, Advisor Credit Exchange, Alza, Pandion, and Level. Several startups have also made significant cuts: Amsterdam-based Bird laid off 33% of its workforce, Hugging Face reduced staff by 4%, and Tabnine cut 18% of its tech force.
What do these startup layoffs and shutdowns mean for the tech industry in Europe and the UK? Tech Funding News investigated the root causes.
Germany and the UK – new leaders in tech layoffs, just after the US
Britain and Germany have emerged as new epicentres for tech workforce reductions. In early February, Alphabet-backed fintech GoCardless laid off 20% of its employees, bringing its staff down from 764 to just over 600 since 2023. Just yesterday, fintech unicorn Zepz announced a 20% reduction in its global workforce, affecting around 200 employees.
Onfido (acquired by Entrust in April 2024) confirmed previous speculation about staff reductions in its latest financial report. The company’s average employee headcount dropped by 19% to 224 (from 275 in January 2023), noting that they “continue to review and manage headcount and operational expenses in line with revenue.”
In Europe, Netherlands unicorn Bird cut 33% of its workforce (approximately 120 employees) as part of a strategic realignment to integrate AI and optimise global operations. German companies followed suit: Chrono24, a retail startup, cut 24% of its workforce due to declining watch prices and market volatility, while Berlin-based recruiting startup HeyJobs laid off 90 employees.
French-American AI company Hugging Face reduced its workforce by 4% (approximately 10 employees), primarily affecting its sales team. These cuts reflect a broader struggle among venture-backed open-source AI developers to achieve profitability.
AI: Catalyst or scapegoat for tech layoffs?
Recent European layoffs show a clear downsizing pattern, most notably in fintech. Two main factors drive this trend: the rapid adoption of AI and competitive pressure from Big Tech companies. Giants like Meta, Microsoft, Amazon, and Salesforce are simultaneously laying off thousands while pouring resources into AI development.
This pivot to AI-driven operations is transforming employment patterns. As automation threatens routine administrative positions, it’s also creating fresh opportunities in AI development, data science, and human-AI collaboration. The World Economic Forum projects that while 85 million jobs may disappear by 2025, the shift could generate 97 million new positions, offering hope for the future of the tech job market.
However, AI isn’t solely responsible for these layoffs. Economic pressures, market volatility, and the need to cut costs are forcing companies to streamline their operations. This challenging environment has hit startups particularly hard, especially in the fintech and AI sectors, leading many to reduce staff or shut down completely.
More tech layoffs are likely to continue in 2025
The European and UK startup ecosystem faces continued workforce adjustments. While the Netherlands and Germany report significant tech sector layoffs, the UK shows mixed signals. A survey found that 74% of UK tech businesses reduced their workforce by 5% to 25% over the past year, indicating ongoing alignment with market conditions and financial goals.
Yet some reports point to increased tech hiring in 2025, with 46% of IT and tech hiring managers planning team expansions. The industry maintains a cautious outlook, with many workers prioritising job stability over salary — reflecting recent layoff challenges.
Long story short: while the European and UK startup landscape will likely see continued workforce reductions in 2025, selective hiring in high-demand areas, particularly in AI and emerging technologies, may help balance these losses.
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