When Band, a digital payments startup with a $74 billion market value, laid off over 1,000 employees a few days ago, its co-founders blaming themselves. “We have too many employees, given the world we are in,” they wrote. “We were very optimistic.” Because the Elon Muskits new owner Twitter, cut the company’s staff in half last week, with Jack Dorsey, founder of the social media platform and former CEO, taking charge. “I increased the size of the company very quickly,” he tweeted. And on Wednesday when Metaparent company of Facebook and Instagram, laid off 11,000 people, or about 13% of its staff, CEO Mark Zuckerberg explained the situation by excessive zeal to expand activities. “I have made the decision to significantly increase our investment,” he wrote in a letter to employees. “Unfortunately, things didn’t turn out the way I expected.” High-tech executives across Silicon Valley admit they are hiring too many workers, quick to attribute the current cuts to the worsening economy.

One by one, Silicon Valley leaders are admitting their mistakes and reassessment in the post-pandemic era.

When companies enjoyed high profits and the belief that the good days thanks to the pandemic would continue, they expanded aggressively, accumulating the most belligerent and expensive resource in software: talent. Hi-tech groups have long viewed recruiting as more than just filling vacancies. The industry’s fierce wars for talent have shown that companies like Google and Meta, the best and brightest professionals won. And for employees, work has become something more than it was, it has become a person. This mentality is ingrained in the biggest tech companies that offer a lot of perks on fancy corporate “campuses” that rival universities. This model has also been copied by smaller startups that offer their employees a life-changing enrichment opportunity in the form of stock options. Now these practices are causing “intolerance” in the tech industry. “In good times, you overdo it, you hire too many people and you are full of optimism,” said Josh Wolfie, an investor at Lux Capital. “Over the past 10 years, an abundance of cash has led to an abundance of hiring.”

More than 100,000 tech workers have lost their jobs this year, according to Layoffs.fyi, a website that tracks layoffs. The cuts affect a wide range of groups, from large and well-known public companies such as Meta, Salesforce, Booking.com and Lyft to large private startups such as delivery service Gopuff and financial platforms Chime and Brex. Finally, it is worth noting that many job losses are also being observed in the most experimental technology sub-sectors. Rocket company Astra this week cut 16% of its workforce after tripling its staff last year. In the cryptocurrency industry, which has experienced a crisis this year, large companies such as Crypto.com, Blockchain.com, OpenSea and Dapper Labs have laid off hundreds of employees in recent months.