Latch layoffs a symptom of slowing tech sector despite strong jobs report

NEW YORK – Last week, smart access SaaS company Latch Inc. announced restructuring in order to increase its operating efficiency.  

In the official press release, the company stated the August workforce reduction would affect 115 employees, 37 percent of its full-time employees. “Under this plan, Latch will renew its focus on higher margin activities with customers, continue to grow new high margin recurring revenue, and more closely align its organizational structure with the size and focus of the business,” The release stated. “The reduction is expected to result in approximately $2.5 million to $3.5 million of total cash restructuring and related charges primarily related to severance and benefits costs (excluding the impact of share-based compensation), substantially all of which is expected to be incurred in the third quarter of 2022.” 

Security Systems News reached out to Latch for further information about the restructuring, but the company declined to make any further comment at this time. It marks the third round of layoffs this year for the residential security company.  

They’re not the only company facing layoffs, however, as despite a stronger than expected jobs report in the US (528,000 jobs added in July) the tech sector is experiencing growing pains. In late July cyber risk management company Arete let go a sizable amount of its workforce, though the number is disputed. Secure access company Appgate in the same week announced a workforce reduction of 22 percent of their workforce, a total of 130 employees and contractors. It’s been a bad stretch for security and cybersecurity since at least May this year. The “Why” is a myriad of varied reasons, but an unstable economy and unpredictable global politics have seen businesses tightening their belts to reap profits.  

Despite willingness to hire in some parts of the security sector employers are finding the workers just are not there. SSN Editor Cory Harris found in the July News Poll that all the respondents were having trouble finding applicants even though jobs were being posted. A Q3 employment outlook survey by the ManpowerGroup found 75 percent of employers have a talent shortage, a six percent increase compared to the prior year. “This recovery is unlike any we have ever seen – demand for skills is at a record high in many markets and unemployment levels remain high while workforce participation stagnates," the report stated. 

There have been at least 70,955 workers laid off since the start of 2022. Of those, 2,423 have been in the security industry, and 34,000 were tech workers.