Innovative start-ups are rising from the ashes of Big Tech layoffs. Here’s how they could also win.
Are you a start-up in the tech industry? Is your business looking for opportunities to hire experienced tech talents? Are you hoping to scale up your business through partnerships and venture funding? Are you daring, innovative and flexible enough to attract exceptional skills and Big Tech attention? The recent Big Tech layoffs may provide solutions to some of your problems.
Layoffs will continue as Tech Companies hedge over a turbulent future.
The technology industry is evolving. Unfortunately, the evolution comes with Big Tech layoffs. In 2022, for instance, tech layoffs, according to reports from layoffs.fyi surpassed 155,000. The layoff bug caught up with big tech companies like Twitter, Meta, Tesla, Shopify, Microsoft, and Netflix.
The emerging trend of Tech layoffs may remain ongoing as many companies delayed the exercise until 2023. For instance, Amazon recently announced plans to lay off 18,000employees in 2023. Google and its parent company, Alphabet, also announced massive layoffs of 12,000 employees, the biggest in its 25-year history. Also, Salesforce started the New Year with 10% (about 8000 staff) redundancies in its workforce. Microsoft CEO Satya Nadella recently announced job cuts of 10,000 via email to staff. Based on information obtained from layoffs.fyi, more than 60,000 tech employees have lost their jobs in 2023.
A layoff decision is usually tricky, and companies should use it only as a last resort. Every organization wants to keep its employees after spending a fortune to train them. But, as companies hedge over a turbulent future, Big Tech layoffs will continue.
There is always a good side to layoffs.
Layoffs affect the victim, the business and the surviving employees in various ways. Employee morale hits the rock after each round of disengagement. And there are suggestions that layoff dampens survivors’ creativity. According to a Harvard Business Review article,
“Layoffs tend to increase employees’ levels of stress, burnout, and insecurity and to decrease morale, job satisfaction, and trust.”
Layoffs can be a hard reality for those affected. Still, it can also be an opportunity for growth for start-ups. But with the right approach, the on-going tech layoffs could drive start-up ideas and increase innovation and business partnerships.
So, if you’re a start-up looking to gain from the Big Tech layoffs, here are three ways to go about it.
Big Tech Layoffs increase the availability of experienced talents for hire.
Layoffs make finding experienced people willing to join emerging start-ups easier. For instance, according to Insider, Microsoft recently laid off their internal team members responsible for integrating ChatGPT technology into Bing. The layoff allows daring start-ups to hire these experienced tech talents. It will also save the time and cost of hiring and training inexperienced staff.
Despite the massive tech layoffs of 2022 and 2023, job prospects for experienced tech talents remain high. According to Indeed’s list of best jobs for 2023, 8 out of 10 best job roles are in the technology sector. Job roles in tech also occupied the top three spots in this year’s list.
Competition to get the best tech talents will remain high despite recent layoffs. The reason is that skilled workers are getting strategic in choosing their next employer. So, they are not only after jobs in emerging tech start-ups. They are also looking for employment in government and non-profits.
To win with the Big Tech layoffs, start-ups must tweak their operational policies. The change will make it easier for skilled talents to contribute. Before the Big Tech layoffs, there were primary considerations for job offers in tech. These include enhanced pay and better working conditions. But with increasing tech layoffs, employees now demand flexibility in addition. They also want the opportunity to make a significant impact in their new roles. Start-ups willing to provide these pecks would gain from the Big Tech layoffs.
Tech Layoffs create opportunities for the growth of innovative start-ups.
Start-ups are emerging from the ashes of layoffs in the technology sector. They are also making giant strides in technology and innovation as they seek new ways to improve existing products and services. Thus, start-ups provide platforms to further the growth of technology and innovation.
Recent layoffs at Silicon Valley raised a new generation of entrepreneurs behind the growth of innovative tech start-ups. The Big Tech layoffs have also created venture funding opportunities for emerging start-ups. One such initiative is “Funded, not Fired,” set up for start-ups founded by people laid off from their Big Tech jobs.
Day One, an early-stage venture fund in San Francisco, launched the programme in 2022. Day One plans to invest $20 million in 20 companies. It hopes that a breakthrough in one returns the entire investment. The programme has received more than 1000 applications, many of which come from employees laid off from Big Tech Companies.
Also, Index Ventures recently launched a $300 million global seed fund for extraordinary entrepreneurs. The seed fund, Index Origin 11, is an early-stage investment programme. It provides start-ups with the financial and business resources to develop their big business ideas. Index Ventures is a European venture capital firm based in San Francisco and London.
Index Ventures primarily invests in technology-enabled start-ups focusing on e-commerce, fintech, mobility, gaming, infrastructure/AI, and security.
Big Tech Layoffs Strengthen Business Relationships and Partnerships.
Big Tech Companies always look for new ways to streamline processes and cut costs. They also want to remain at the forefront of technological innovation. The Big Tech layoffs have created opportunities to partner with innovative start-ups. Start-ups founded by talented ex-employees are usually the first beneficiaries.
Some Big Tech Companies are hedging against a possible downturn in 2023 and beyond. So, they are scaling back their operations to focus on their core activities. Strategic partnerships, alliances, and venture funding have become more prevalent. Thus, start-ups considered too small to work with Big Tech Companies are getting second attention. Tech start-ups founded by laid-off employees may become partners with their former companies.
Last Word
Skilled and talented employees often become victims during layoffs. Tech Companies believe it is sometimes necessary to cut back to move forward. Tech layoffs in 2022 and 2023 are painful and difficult. But it has opened opportunities for daring start-ups to exploit.
Tech layoffs create opportunities to hire experienced talents. It also drives innovation in emerging start-ups. The ensuing partnerships could help start-ups remain focused, reduce costs and become more competitive.
These wins don’t come easy. Start-ups must first survive. To survive, they must be technology-enabled, innovative and flexible.
The article was originally published in Medium.
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