Utah tech companies have been struggling and laying off staff after years of meteoric growth. In 2022, at least 15 Utah companies — 11 in the last three months of the year, or “Q4″ in corporate-speak — have laid off staff, according to the tech layoff tracker layoffs.fyi.
Even workers at so-called Silicon Slopes “unicorns” — privately held companies valued at more than $1 billion — aren’t safe. Route and Podium, two e-commerce companies, began December with staff reductions. Pluralsight, which sells online training courses, followed, laying off 400 people, about 20% of its workforce.
The downturn is being felt across the U.S. tech sector, not just in Utah. But the Beehive State is unique in that tech workers make up a larger percentage of the workforce than the national average, according to the University of Utah’s Kem C. Gardner Policy Institute — so a downturn in the tech sector here could hit harder than it might elsewhere.
Unemployment in Utah County, where much of Utah’s tech industry is located, sat at 2.2% in November, the same level as statewide, according to data from the Utah Department of Workforce Services. That’s well below the national rate of 3.7% in November. But it’s above the jobless rate of 1.7% that Utah County recorded in March, a 30-year low.
Gov. Spencer Cox said his office knew high interest rates would lead to a contraction in Utah’s tech sector. And in a news conference on Dec. 15 he said he expects more layoffs into the new year.
“There was so much money that was being thrown around and these valuations in tech were astronomically high for companies whose products were not making money yet, right?,” he said, “... [t]hat was always going to be a problem as soon as capital got more expensive, which is what happened when interest rates went up.”
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