Are Startups Benefiting from Big Tech’s Layoffs and Hiring Freezes?

Competition between tech companies for top talent is nothing new, but the landscape of tech has been changing as the economy continues to decline. Companies are having to make cuts, and Big Tech is not immune. However, it has presented smaller companies and startups with the opportunity to pick up talented employees that would usually be snatched up by larger and more established companies.

Every company is feeling the pressure: Tough economic times have affected everyone, and that includes big names like Microsoft, Amazon, and DoorDash. But startups are not immune to what is happening, with many of them laying off employees in a bid to remain profitable, including digital health startup Truepill and delivery startup Gopuff.

• While Google has managed to stave off a mass layoff, the company implemented a hiring freeze and is considering laying off those with poor performances as things become tight this year.
• Meta had some of the most intense layoffs, slashing 11,000 people from the company.
• After Elon Musk’s takeover, Twitter experienced a major upheaval, losing thousands of employees to layoffs and resignations.
• Andreessen Horowitz’s tech publication, Future, shut down completely.

Tech layoffs have exceeded the Great Recession: In 2022, the tech industry saw 210,000 people lose their jobs. That number exceeded the Great Recession’s numbers. Moreover, many people lost their jobs in the final quarter, which accounted for roughly 40% of the total.

There are expectations that things will not slow in 2023, which could mean even more people will be out of a job and looking for work. While this is alarming, it also means there will be a lot of talented individuals up for grabs.

Jobs at large tech companies are not as appealing: The landscape of the tech industry has changed significantly because of the layoffs and hiring freezes. Not only are jobs at many of the larger companies more difficult to land, but one of the things that made them most appealing is no longer there — stability.

Without the promise of a stable future, many are beginning to look at startups and small- and mid-sized companies. There is more flexibility and opportunity to be found, and these companies present as a more reasonable option than ever.

• Layoffs have changed how employees think about a job, with a company’s financial standing and pragmatism at the executive level becoming important.
• Many startups are also better positioned than large companies to support remote work because of their flexible nature, which appeals to many workers, especially in tech.

Startups benefit from the situation: Despite the layoffs, competition is still high in the tech industry. There are fewer offers on the table at any given time, but there are plenty of opportunities for talents. Moreover, fewer offers also result in startups having an easier time retaining employees since recruiters have their hands full and big companies are not making as many offers. Like everyone, tech is struggling, but Big Tech’s loss is another company’s gain.