What Is Tech Winter? Know Understanding, Cause, And Impact For Startup Companies

Illustration of the state of dismissal at the company. (Photo: Unsplash)

YOGYAKARTA Some time ago, the term tech winter was widely discussed by the public. This phenomenon dealt a serious blow to technology-based companies, especially startups. Due to the tech winter, many startup companies went out of business.

In addition, the tech winger also forced companies to terminate their employment so that they could cut operational costs. So, what is a tech winger?

The term tech winter first appeared at the end of 2022 and is still ongoing today. In the tech winter period, there were many technology-based companies that experienced bankruptcy.

Tech winter is a term used to describe a significant period of decline in the tech industry.

In Indonesian, tech winter is defined as the winter of technology, where there is a decrease in interest and investment in the technology sector.

During the tech winger period, funding for technology companies slumped sharply, business growth slowed, and even experienced a decline in layoffs (PHK).

For example, a number of leading technology companies were forced to cut the number of their employees, from Meta, which lay off 11 thousand employees to Twitter (X) who fired 3,500 employees.

In Indonesia, there are a number of technology-based companies that have been affected by tech winners, such as Shopee Indonesia, TaniHub, SayurBox, Ajaib, and Ula.

Causes of Tech Winter

It has been mentioned above that tech winter is a significant period of decline in the tech industry. This condition was originally already taking place since the second quarter of 2022, but was only widely discussed at the end of last year.

Some experts argue that the tech winter is caused by the COVID-19 pandemic which has lasted for more than two years. Due to the pandemic, economic activity has become limited.

In addition, tech winners are also caused by geopolitical turmoil that has caused the global economy to decline, changes in market sentiment, large business failures, and an increase in the interest rate of the US central bank.

The last cause makes investors reluctant to invest and prefer to save their money.

Tech Winter Impact

The tech winger phenomenon can have a fairly serious impact on technology companies and startups, such as:

That's the information about what tech winners are. Hopefully this article can add insight to the loyal readers of VOI.ID.