The end of the tech boom has sparked a flurry of job cuts as companies move swiftly to tighten their belts. Recruitment at Meta and Uber has slowed, job offers from Twitter and Coinbase have been rescinded and deep lay-offs have swept parts of the sector.
But while household tech names have grabbed attention for pulling back on recruitment after a prolonged period of headcount expansion, some analysts, recruiters and jobseekers are finding some reasons to stay calm – for now.
Job postings for software developers in the US are up 120 per cent above an early 2020 pre-coronavirus pandemic baseline, according to data from recruitment site Indeed.com. ZipRecruiter, another job listings site, said the number of openings in the tech sector was strong, with about 1.6 jobs for every unemployed person in the industry.
As a result, the tech companies that are hiring are still pulling out the stops, offering signing bonuses and the promise of fully remote work. About 36 per cent of job postings in tech offered the option to work remotely, according to ZipRecruiter, compared with just 12 per cent in 2019.
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“There are way more jobs than people who are chasing these jobs,” said Sinem Buber, ZipRecruiter’s lead economist. “Companies are doing whatever they can. They are meeting the demand of the job seekers in order to fill these vacancies.”
Among the quickest to cut back staffing were the tech companies that benefited from a pandemic-related rise in demand for their products and services. Robinhood, Peloton, Netflix and Cameo have all announced lay-offs. Meta, Uber, Snap, Instacart and Lyft said they would slow hiring.
“There is still so much uncertainty,” said PitchBook analyst Kyle Stanford. “Is it going to be a total economic collapse? Or is it going to be a slight kind of blip in the longer-term timeline?”
Other parts of the tech industry have not had to make such deep cuts, with recruitment holding firm. Job seekers with cyber security expertise, or in development and operations, remained in particularly high demand, recruiters said.
“What I’ve seen is companies fall into two buckets,” said one 27-year-old worker who had his offer to become a project manager at Twitter rescinded, only to find himself in high demand elsewhere. “Either they’re still recruiting as if nothing’s happening, or they’re selectively recruiting and they’ve scaled down a little bit.”
After posting a message on LinkedIn about the lost offer – which had been in place since October as part of a graduate recruitment scheme – he was flooded with approaches. He said he has turned down dozens of “serious” offers and was going through the process of interviewing with about 10 standout companies.
Those still hiring said employees had the upper hand in a historically tight labour market. Software engineering management platform LaunchDarkly, a remote company nominally based in Oakland, said the lay-offs at big groups and the doomsday commentary around tech sector opportunities had not changed what it needed to do to attract top talent.
“This is all so new, we haven’t seen the impact yet,” said Dana Ray, LaunchDarkly’s chief people officer. “Will salaries come down? Will we not have to use sign-on bonuses? Will we not have to put out as big equity packages? I don’t know that we know yet. It will be interesting to see three months from now, six months from now.”
Layoffs.fyi, a website that tallies job cuts, said the losses rippling through the tech sector have yet to match the obliteration seen during the early days of the Covid-19 pandemic.
But with almost 17,000 workers laid off in May, according to its tally based on media reports and worker submissions, some company leaders appeared to share the “super bad feeling” about the economy expressed by Tesla chief executive Elon Musk this month.
With venture capital groups warning that cheques may be hard to come by for the next year or longer, privately owned companies are hiring with a view to sustainability. Y Combinator, the start-up incubator best known for nurturing Airbnb in its early stages, warned founders in a letter that the “safe move is to plan for the worst”.
The tech sector’s mantra of “growth at all costs” has transformed seemingly overnight into something much more sensible, suggests Pitchbook’s Stanford.
“Realistic growth, sustainable growth is probably what companies are going to be looking for,” he said. “Definitely some sense that a company can, when they go public, flip a switch, or make a couple of changes, and then really drive for the profits down the road.” – Copyright The Financial Times Limited 2022
