HubSpot, a Cambridge-based marketing software company, announced on Tuesday that it would be reducing its workforce by 7%, or roughly 500 employees, as well as consolidating some of its offices, due to a decrease in orders from its customers.
HubSpot has joined a growing number of tech companies, both large and small, who have had to make cuts to their workforce after experiencing a decline in sales. This follows a period of growth at the beginning of the pandemic. In recent months, companies such as Wayfair, Google, and numerous startups have also had to lay off workers. For example, Wayfair trimmed 10% of its workforce, equating to 1,750 employees, while Google cut 12,000 jobs. The reduction in sales is attributed to a slowdown in the economy and the rise of inflation.
According to Liz Herbert, a software industry analyst at Forrester Research in Cambridge, many companies over-hired due to both the pandemic and low interest rates. The stock market boom during this time period also placed a greater emphasis on sales growth over profitability.
“We came into 2022 anticipating growth would slow down from 2021, but we experienced a faster deceleration than we expected,” chief executive Yamini Rangan said in an e-mail to employees obtained by the Globe. “Unfortunately, the level of uncertainty in customer demand now tells us that we may have more challenging times ahead. We need to set ourselves up to weather this storm.”