About 173 tech companies across the world shed roughly 55,000 jobs in January alone, the highest monthly cut since last year, led by Microsoft which has announced it is sending home over ten thousand workers.
Last year, a total of 1035 tech companies laid off 158,951 workers with the highest monthly record being 52,145 in November.
The global trend is worrying for Kenya where almost half or 47.7 percent of the population are in the service industry which is largely dominated by tech, banking, and insurance.
The global shrinking in employment has seen tech companies based in Kenya fire over 349 workers including Twiga, Cloud Factory, MarketForec, Sendy, and Kune who have culled between 10 to 30 percent of their workforce.
Tech companies are shedding jobs across the world in a bid to cut costs in anticipation of a global economic slowdown and a possible recession.
Central Banks across the developed world are raising rates which means the cash that has been flowing into tech startups is drying up forcing companies to restructure their business to ensure sustainability even as they pay back dollar loans that have become expensive due to the steady decline of the Kenyan shilling against major world currencies.
Kenyan tech companies are taking a hit given they are mostly funded by seed capital from the developed markets.
Out of the companies that collapsed, Kune had received seed funding, while Cloudforce had raised Series A funding.
Series A funding is initial financing for companies that have a great idea, and enthusiastic users but has is yet to fully monetize the idea. Typically, Series A rounds raise approximately $2 million to $15 million.
Sendy had received Series B funding, typically scaling up funding to meet higher levels of demand while Twiga was on Series C, funding for successful companies looking to develop new markets, expand and even acquire rivals.