How bad is Big Tech’s hiring freeze?
The end of the tech boom has sparked a wave of job cuts as companies move quickly to tighten their belts. Recruitment at Meta and Uber has slowed, job postings from Twitter and Coinbase have been rescinded, and mass layoffs have swept through parts of the industry.
But while home tech names have drawn attention for slashing hiring after a long period of workforce expansion, some analysts, recruiters and job seekers are finding reason to remain calm – for now.
According to data from recruitment site Indeed.com, job openings for software developers in the United States are up 120% from the pre-coronavirus pandemic benchmark of early 2020. ZipRecruiter , another job board, said the number of openings in the tech sector was high, with about 1.6 jobs for every unemployed person in the sector.
As a result, hiring tech companies continue to go into overdrive, offering signing bonuses and the promise of fully remote working. According to ZipRecruiter, about 36% of tech job postings offered the option to work remotely, up from just 12% in 2019.
“There are far more jobs than people looking for those jobs,” said Sinem Buber, senior economist at ZipRecruiter. “Companies are doing everything they can. They respond to demand from job seekers to fill these vacancies.
Among the quickest to downsize are tech companies that have benefited from a pandemic-related surge in demand for their products and services. Robinhood, Peloton, Netflix and Cameo have all announced layoffs. Meta, Uber, Snap, Instacart and Lyft said they would slow down hiring.
“There are still so many uncertainties,” said PitchBook analyst Kyle Stanford. “Is it going to be a total economic collapse? Or is this going to be some sort of slight hitch in the longer-term timeline? »
Other parts of the tech industry haven’t had to make such deep cuts, with one recruiting firm. Job seekers with expertise in cybersecurity, or in development and operations, remained particularly in demand, recruiters said.
“What I’ve seen is companies fall into two buckets,” said a 27-year-old worker whose offer to become a project manager at Twitter was rescinded, only to find himself in high demand elsewhere. “Either they are still recruiting business as usual, or they are recruiting selectively and they have reduced a 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 inundated with approaches. He said he had turned down dozens of “serious” offers and was going through the interview process with about 10 standout companies.
Those still hiring said employees had the upper hand in a historically tight job market. Software engineering management platform LaunchDarkly, a remote Oakland-based company, said corporate layoffs and apocalyptic comments about tech sector opportunities haven’t changed what to do. to attract the best talent.
“This is all so new, we haven’t seen the impact yet,” said Dana Ray, human resources director at LaunchDarkly. “Wages will they go down? Won’t we have to use login bonuses? Won’t we have to put in big equity packages? I don’t know if we know yet. It will be interesting to see in three months, in six months. »
Layoffs.fyi, a website that tallies job cuts, said the losses rippling through the tech sector have yet to match the wipeout seen at the start of the Covid-19 pandemic.
But with nearly 17,000 workers laid off in May, according to his tally based on media reports and worker submissions, some business leaders appeared to share the ‘super bad sentiment’ about the economy expressed by the chief executive. of Tesla Elon Musk this month.
While venture capital groups warn that checks may be hard to come by for the next year or more, private companies are hiring with sustainability in mind. Y Combinator, the start-up incubator best known for nurturing Airbnb in its early days, warned founders in a letter that the “safest course is to plan for the worst.”
The tech industry’s mantra of “growth at all costs” seemingly transformed overnight into something much more sensible, Pitchbook’s Stanford suggests.
“Realistic growth, sustainable growth is probably what companies are going to be looking for,” he said. “Certainly some sense that a company can, when it goes public, flip a switch or make a few changes and then really drive for the profits down the road.”