During the last few weeks, mass layoffs were the main news from technology companies. Elon Musk, with a sharp job cut at Twitter, was followed by another batch at Salesforce and Meta. They also add up to thousands in the reduction in firms such as Snap, Lyft or Stripe. Initial numbers speak of more than 118,000 people losing their jobs this year in technology companies.
In addition to these situations, there are other actions being taken by companies in the sector. Companies such as Amazon and Apple have decided to slow down or freeze any hiring until after the first quarter of 2023. Then comes the issue of whether these people who are left without their jobs can be absorbed back into the sector.
Many workers have obtained new jobs on an individual basis. However, there is a greater perspective that technology workers have a solid foundation. Their skills continue to be in high demand and a groundswell of support was added for those laid-off workers in their search for new jobs.
Mass layoffs in the eye of the storm
Although the headlines have made this the biggest news story of the past few weeks, Big Tech companies are part of a niche in the technology industry. More and more small and medium-sized companies are hiring technology workers. Of course, the rates are lower than what the giants in the sector can afford. Likewise, the salary potential is below what Big Tech companies could pay.
Several companies see this reality as an opportunity to attract people who were monopolized by the largest companies in the sector. Julia Pollak, chief economist at ZipRecruiter, understands that “these workers have a big advantage.” In addition:
“There is a strong demand for tech talent in a wide range of industries, from government to retail to agriculture. Those industries in recent years have been left in the dust.”
The reality behind the success
There is an almost forced exodus from Big Tech that creates new opportunities for firms and investors looking to create the “next” great invention. Nick Popovich, CEO of an indie game studio, tweeted that “for everyone affected by the Meta: Monomi Park layoffs, Monomi Park is hiring.” A venture capital firm, Day One Ventures, picked up the gauntlet in the face of Big Tech’s layoffs with a novel initiative. It proposed investing about $100,000 in 20 different startup ideas with priority given to laid-off workers from tech giants.
Pollak understands that companies have “two divergent paths for technology workers.” This economist stated about market possibilities that “one group is taking a flight-to-safety approach and is leading recession-resistant companies and industries”. As for the second alternative, Pollar said that “another group will put aside the concern and take a big risk and start their own companies”.