During the pandemic, there was an unprecedented demand for tech talent. After a dream period for techies, nearly 200 tech companies have announced layoffs so far in 2022. But the situation is not so bleak. The demand for technical minds with the right skills is still strong. In fact, I would like to point out the silver lining in this tightening market.
Over the past two years, flushed with easy funding, several software product & service companies went on a hiring frenzy – recruiting talent in anticipation of demand to create products or to service. The recruitment was not on a need basis, rather it was a race to grab the software engineers, even if it meant keeping them on the bench without anything to do for months. They were hoarding up talent from across the world as remote work became a norm. It was clearly not a healthy outcome for the techies as they were not learning anything and their skills were getting outdated in the fast-paced tech world. Nor was it a sustainable trend for the employers.
Economic headwinds and the Ukrainian crisis are causing a slowdown in the revenue growth of even bellwether companies like Meta. The recent shakeup in the tech market has caused valuations to drop and has made funding scarce for risky sectors like crypto. However, even in the crypto world, the real gems continue to shine. Take the example of Binance, which has always avoided splurging on promotions and has now a healthy war chest to expand its hiring and M&A activity. Companies like Crypto.com and Coinbase, which were spending big advertising dollars, on the other hand, are either laying off people or have paused hiring. Experienced techies exiting these companies offer a big pool of talent for companies like Binance to tap into.
With the markets correcting themselves, the fat is melting, and companies are getting leaner. Those getting laid off do have several other options out there. According to ZipRecruiter, there are 1.6 jobs for every unemployed person in the tech sector. Hopefully, it will also become easier for services companies like us to hire and retain talent, unlike the past two years. We have recently opened our fourth office and are always looking to hire great talent.
It is difficult to predict how the situation is going to pan out, but what we have seen is that the spirit of innovation survives even the toughest times. The tough get tougher in the face of tough times. We are entering a new era of capital efficiency and the lean, agile companies will be the best poised to maneuver their strategy in the face of changing trends.