The last few years have shown that no one in the white-collar job market — not even software — is safe. As layoffs rise, some well-known workplace software providers are feeling the impact, with Wall Street and potential buyers taking notice.

Just another line item: As American giants like MetaMETA

, BoeingBA

, and IntelINTC

turn to layoffs to thin their payroll expenses, companies have also pulled back on another important line item: software that their former employees used (…or perhaps didn’t use much at all). Over the past year, productivity, collaboration, and customer relationship management (CRM) software companies have struggled on Wall Street, dealing with rising customer churn, weaker profits, and angst about the future of work.

• Productivity tools like AsanaASAN
  , DropboxDBX
  , and FreshworksFRSH
  have seen steep declines — down 28%, 9%, and 45% year-to-date, respectively.
• Similarly, CRM-focused firms like HubSpotHUBS
  and SalesforceCRM
  have lagged behind the S&P 500 as they grapple with slowing growth — with their stocks up just 14% and 3% YTD.

Manage This

To keep their own costs in check, productivity names — like Dropbox and startup Miro — have conducted massive layoffs to become leaner. However, some companies see hope for the productivity software market, with positive results and outlooks hinting that changing software trends could bring new opportunities.

• Earlier this year, Asana introduced AI-driven “teammates” to tap into demand for AI agents that boost employee productivity through workflow automation.
• Jira and Confluence parent AtlassianTEAM
  entered a new business by launching cloud software, which helped it report a 33% rise in subscription revenue and boost its outlook for the coming quarter.

There’s always the easy way out… Some companies have discovered that the quickest way out of the Wall Street pressure cooker is through acquisitions. In 2022, as the software sector began to decline, Zendesk was bought by private equity giants Permira and Hellman & Friedman in a disappointing $10.2B deal that gave it a 34% premium over its closing price. In recent months, interest in the category has picked up again, with GoogleGOOGL

reportedly eyeing HubSpot. And just last week, SmartsheetSMAR

announced it would be taken out by Blackstone and Vista Equity in an $8.4B deal — bringing its YTD return to 20%. Potential buyers may be circling the sector for its valuations… and some might even be competitors.