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Warning sign: Tech companies of All Sizes and Ages Are Starting to Have Layoffs

davidstockmanscontracorner.com / By Alexei Oreskovic at Business Insider / 

What do Twitter, Microsoft, and Snapchat all have in common?

They have all had layoffs in recent months.

The reasons for the layoffs are as varied as the companies’ products, but the job cuts provide an interesting counterpoint to the parade of mega-funding and billion-dollar startup announcements that have dominated headlines all year.

Even as the tech industry appears to be thriving (and, some argue, at or nearing dangerous bubble levels), tech companies are cutting costs and handing out pink slips.

The question is whether the layoffs are a healthy sign, reflecting disciplined businesses taking measures precisely to avoid overextending themselves, or the first early-warning signals of a changing market.

“There is a general sentiment that the tech-financing market is getting tougher at every stage,” says Chi-Hua Chien, cofounder of the venture capital firm Goodwater Capital.

He notes that recent layoffs at Twitter and at the startup Flipagram are most likely different. But he says: “Smart boards are looking ahead to tighten up fixed costs and trim the fat in their organizations. We’ll probably see more of this in the next few quarters.”

Old guard versus vanguard

The tech industry giants Hewlett-Packard and Microsoft have alreadyslashed thousands of jobs this year. Those companies are old-guard firms scrambling to retrench and restructure aging businesses.

Some of the internet companies that have recently cut jobs are also in the troubled category, such as Groupon and Living Social.

But layoffs are starting to hit the younger mobile and social apps that are the vanguard of today’s tech industry.

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